1/13/26 Item #7
Council and
Authorities
Concurrent Meeting
Item #7, RTC 26-1719
Action to Approve the Issuance
of the First Series of Measure I
1852 General Bonds in a Maximum
THE MISSION CITY Principal Amount Not to Exceed
$100,000,000
January 13, 2026
Agenda
• Overview
• Bond Structure / Market Factors
• Bond Documentation
• Bond Issuance Timeline
• Fiscal Impact
• RTC Recommendations
City of
Santa Clara
POST MEETING MATERIAL
1 Overview
• November 5, 2024: Voters in the City of Santa Clara approved Measure I, the Public Facilities and Infrastructure Bond Measure.
• June 24, 2025: The City authorized an ad valorem property tax levy for FY 2025/26 for the repayment of debt service on General Obligation Bonds expected to be issued in 2026.
August 27, 2025: The Project List for the 2026 General Obligation Bonds was presented, reviewed and unanimously approved by the City's Measure I Bond Compliance Oversight Committee.
• September 16, 2025: City Council approved the Project List, including a total of 27 projects. • 4th Quarter FY 2025/26: Next City Council Measure I update.
City of
Santa Clara
Bond Structure
• The 2026 General Obligation Bonds will be issued in two series:
Series 2026A: tax-exempt, general obligation bonds used to finance municipal capital projects. eries 2026B: tax-exempt 501(c)(3), general obligation bonds used to finance municipa apital projects that will be used by eligible nonprofits for charitable purposes, ensurin compliance with IRS requirements.
Project Categories Series 2026A Series 2026B Total Costs Streets and Transportation $27,370,000 $ $27,370,000
Fire Stations and Emergency Response 12,285,450 - 12,285,450 Police Facilities 805,000 805,000
Parks, Libraries, Senior Center and Aquatics 14,238,750 24,200,000 38,438,750 Storm Drain System Improvements 16,585,300 16,585,300
Historic Buildings and Beautification _1,150,000 1,150,000 TOTALS $71,284,500 $25,350,000 $96,634,500
City of 4
Santa Clara
2 General Obligation Bonds, Series
2026A and 2026B*
Sources: Senes 2026A Sories 20268 Total
Estimated Total Debt Service
Par Amount $ 71,825,000 $ 25,545,000 $ 97,370,000 25,000,000 Premium 6.689,063 529.019 7.218.082
Total $ 78,514,063 $ 26,074,019 $104,588,082 20,000,000 Sarins 2026A Series 2026B 15,000,000
Project Fund $71,284,500 $25,350,000 S96,634,500
529019 7,218,082 10,000,000
Interestextense rune 6,689,063
Cost of Issuance Fund 314,313 111,787 426,100
5,000,000
Underwriter's Discount 221,295 78,705 300,000
Add'l Proceeds / Rounding 4.892 4.508 9400
Total $ 78,514,063 $ 26,074,019 $104,588,082
Total Debt Service 5736.675.434 $ 26,579,273 $160,394,707 Proposed Princioal a Proposed interest Bond Term 2-Years
True Interest Cost 4.20% 2,78% 4.17% *Subsequent bond issuances will "level" the total City repayment schedule. *Preliminary, subject to change based on market conditions at the time of pricing City of
5 Santa Clara
Credit Ratings
• The City applied for two credits ratings on the 2026 Bonds: INVESTMENT GRADE RATINGS • Moody's assigned their 'Aaa' rating to the bonds MOODY'S S&P GLOBAL • S&P Global assigned their 'AAA rating to the bonds Aaa AAA Aa1 AA+
Strong credit ratings represent: Aa2 AA
• Independent assessment of creditworthiness and financial health Aa3 AA- A1 At
• Appeal to investors and future market access
A2 A
• Lower borrowing costs A3 A-
• Credit strengths include: Baa1 BBB+
Baa2 BBB
• Excellent General Fund reserves and cash positions
Baa3 BBB-
• Robust property assessed valuation growth
• Strong fiscal management
City of
Santa Clara
3 Interest Rate Environment
The FOMC (Federal Reserve) cut interest rates three times in 2025 by 25 basis points (bps), most recently in December:
Tax-exempt rates are down 49 bps on the short end of the curve (5-year), compared to one year ago.
Long-term rates (30-year) are up 33 bps, compared to one year ago.
Borrowing rates are within the 10-year average.
ЛАЛ Municipal Curve
3.00% 7
> ,20%
8.0%
13 110 ye Historical Ronge -1/2/2025 - 1/2/2026 Duration City of
Santa Clara
Operative Bond Documents
Paying Agent Agreement
Between City & U.S. Bank Trust Company (bond paying agent).
Defines bond terms, security, payment mechanics, redemption, and paying agent duties.
Preliminary Official Statement (POS)
Distributed to prospective underwriters / investors.
Details bond terms, security (ad valorem property taxes), City's tax base & financial health.
Must include all material information per federal securities laws.
Continuing Disclosure Certificates
• City commits to annual and event-based filings while bonds are outstanding. • Official Notices of Sale
Authorizes competitive or negotiated sale.
Bonds sold only if Resolution conditions and parameters are met.
City of 8
Santa Clara
he wrether four
4 Bond Financing Schedule
Friday, January 9, 2026 Received Ratings from S&P Global and Moody's Tuesday, January 13, 2026 City Council Meets to Consider Approval of Bond Issuance Thursday, January 29, 2026 Post Preliminary Official Statement (Marketing Period) Tuesday, February 10, 2026 Sale / Pricing (Bonds Sold and Interest Rates Established) Tuesday, February 24, 2026 Closing (Bonds Delivered and Project Proceeds Received) City of
9 Santa Clara
Fiscal Impact*
• Debt service payments are supported solely by Ad Valorem Property Tax • First year net debt service payment amount is estimated to be approximately $16 million. • Will be included in FY 2026/27 budget
• First payment due August 1, 2026
• Annual debt service decreases in FY 2028/29 and levels off at approximately $4.3 million through FY 2055/56
• Series 2026A - matures 2055
• Series 2026B - matures 2027
• Second tranche bond issuance is planned in FY 2027/28 *Preliminary, subject to change based on market conditions at the time of pricing.
City of 10
Santa Clara
5 Financing Team
City Staff - Elizabeth Klotz, Marc Freitas, Luis Haro, Kenn Lee, Linh Lam, Jensen Barna, and Randy Piotrowski
• Bond and Disclosure Counsel - Jones Hall: Scott Ferguson and Katie Dobson • Municipal Advisor - PFM Financial Advisors: Jaime Trejo, Jack Pham, and Ryan Kaplan City of 11
Santa Clara
Recommendation
• Approve and Adopt Resolution which:
a) Authorizes the issuance of 2026 General Obligation Bonds as the first tranche of bonds authorized under Measure I in a maximum principal amount not to exceed $100 million;
b) Approves as to form the Paying Agent Agreement, in substantially the form attached to this Report to Council, and authorizes certain City officers or designees to execute the Paying Agent Agreement;
c) Approves the Preliminary Official Statement, in substantially the form attached to this Report to Council; and authorizes (i) certain City officers or designees to execute a certificate to deem the Preliminary Official Statement substantially final, and i) certain City officers or designees to execute a Final Official Statement; d) Approves as to form the Continuing Disclosure Certificates, in substantially the forms included in the POS attached to this Report to Council, and authorizes certain City officers or designees to execute the Continuing Disclosure Certificates; City of 12
Santa Clara
6 Recommendation (Cont'd)
• Approve and Adopt Resolution which:
forth in the Resolution being met; and
f) Authorizes certain other actions set forth in the Resolution in furtherance of the Issuance of the 2026 Bonds, with the understanding that all required agreements and disclosure documents shall be subject to final approval as to form by the City Attorney.
City of 13
Santa Clara
Council and
Authorities
ATTA CLARIONE Concurrent Meeting
D00000a Item #7, RTC 26-1719
Action to Approve the Issuance
of the First Series of Measure I
1852 General Bonds in a Maximum
THE MISSION CITY Principal Amount Not to Exceed
$100,000,000
January 13, 2026