Redevelopment Successor
Agency Report
City Council Meeting: March 24, 2026
Agenda Item: 11.B
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To: Redevelopment Successor Agency
From: Oscar Santiago, Director, Finance Department
Subject: Adoption of Resolution Approving the Form of a Preliminary Official Statement and Continuing Disclosure Certificate for Tax Allocation Refunding Bonds (2026)
Recommended Action
Staff recommends that the Redevelopment Successor Agency:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Adopt the attached Resolution approving the form of the Preliminary Official Statement and the Continuing Disclosure Certificate for the 2026 Tax Allocation Refunding Bonds, and authorizing certain other actions in connection therewith (Attachments A, B and C).
Summary
Staff is requesting that the Successor Agency to the Redevelopment Agency of the City of Santa Monica (Successor Agency) adopt the attached Resolution approving the form of the Preliminary Official Statement and Continuing Disclosure Certificate relating to the 2026 tax allocation refunding bonds (2026 Bonds), and authorizing certain other actions in connection therewith. The 2026 Bonds will be issued to refund the prior Series 2006 and Series 2011 Bonds (together, Prior Bonds) for debt service savings. The Prior Bonds are currently outstanding in the principal amount of $56,925,000.
The refinancing is expected to result in gross savings of around $13.5 million over the life of the 2026 Bonds, which is equivalent to a net present value savings of 2 of 5
approximately $8.2 million. This will equate to an average annual reduction in total debt service payments of approximately $844,763 per year. This same reduction in annual debt service payments is expected to free up additional property tax revenues for distribution to affected taxing entities, which would result in an average annual increase of approximately $117,700 in property tax revenues to the City.
Final savings achieved will not be determined until the sale of the 2026 Bonds and will depend upon market conditions at the time of sale.
Background
On January 13, 2026, the Successor Agency authorized the issuance and sale of the 2026 Bonds by Resolution No. 49 (SA).
On February 10, 2026, the Los Angeles County Third Supervisorial District Consolidated Oversight Board approved the issuance of the 2026 Bonds pursuant to Resolution No. OB3 2026-62. With the authorization to move forward, the California Department of Finance (DOF) 60-day review process was initiated on February 18, 2026. Staff and the Successor Agency’s financing team are ready to present the Preliminary Official Statement to the Successor Agency for consideration and approval prior to pricing the 2026 Bonds. The 2026 Bonds will be issued and sold only upon receiving DOF approval.
Discussion
The proposed 2026 Bonds are estimated to have a par amount of $50.6 million and a final maturity of July 1, 2042. Based on market conditions as of February 23, 2026, it is anticipated that a current refunding of the Prior Bonds will produce net present value savings of approximately $8.2 million over the life of the 2026 Bonds and an annual average reduction in debt service payments of $844,763 between 2027 and 2042.
Previously, as presented at the January 13th meeting, the underwriter projected $7.0 million in net present values savings, or 12.2% of refunded par. The increase in estimated savings is due to improved conditions in tax-exempt interest rates since 3 of 5
January 2026.
The reduction in annual debt service payments is estimated to increase tax revenues available for distribution to affected taxing entities, including the City. It is estimated that the refinancing will result in an average annual increase of $117,700 in property tax revenues to the City based on current market conditions. Final interest rates and the resulting savings will depend upon market conditions at the time the 2026 Bonds are priced and sold, which is currently anticipated to occur in April 2026.
Staff recommends adoption of the attached Resolution. The Resolution approves the form of a Preliminary Official Statement and Continuing Disclosure Certificate relating to the 2026 Bonds and authorizes certain other actions in connection therewith. • Preliminary Official Statement: The Preliminary Official Statement is the “offering document” for the 2026 Bonds. It describes the Successor Agency, the source of repayment and security for the 2026 Bonds, and certain risks associated with the purchase of the 2026 Bonds.
A form of the Preliminary Official Statement for the 2026 Bonds (POS) has been prepared by Staff with the assistance of Anzel Galvan, the Successor Agency’s Bond Counsel and Disclosure Counsel. The POS was prepared based on information provided by and in coordination with Urban Futures, Inc. (Municipal Advisor), HdL Coren & Cone (Fiscal Consultant), Stifel Nicolaus & Company, Incorporated (Underwriter). The form of POS is attached as Attachment B.
The distribution of the POS is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require that the POS to include all facts that would be material to an investor of the 2026 Bonds. Material information is information that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to purchase or sell the 2026 Bonds. If the members of the Successor Agency’s governing 4 of 5
board concludes that the POS includes all facts that would be material to an investor in the 2026 Bonds, it must adopt a resolution that authorizes staff to execute a certificate pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 to the effect that the POS has been “deemed final.”
The Securities and Exchange Commission (SEC), the agency with regulatory authority over the Successor Agency’s compliance with the federal securities laws, has issued guidance as to the duties of the Successor Agency with respect to its approval of the POS. Under said guidance, if a member of the governing board of the Successor Agency has knowledge of any facts or circumstances that an investor would want to know about prior to investing in the 2026 Bonds, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the POS. The steps that a member could take include becoming familiar with the POS and questioning staff and consultants about the disclosure of such facts. • Continuing Disclosure Certificate: The Continuing Disclosure Certificate will be delivered by the Successor Agency for the benefit of owners of the 2026 Bonds and in order to assist the Underwriter in complying with Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission. This document describes various annual and certain event reporting and disclosure obligations of the Successor Agency, as required by federal securities laws. The form of Continuing Disclosure Certificate is attached as Attachment C.
Environmental Review
The adoption of the Resolution is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines (the common sense exemption) which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” If enacted, the issuance 5 of 5
of tax allocation refunding Bonds would create revenue and promote equity for the City and as such, is administrative in nature. Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA
Financial Impacts & Budget Actions
Refinancing of the Prior Bonds will result in a reduction in annual debt service payments that will free up additional property tax revenues for distribution to affected taxing entities, including the City. It is estimated that the refinancing will result in an average annual increase of $117,700 in property tax revenues to the City based on current market conditions. The estimated revenues and cost savings has been included in the FY 2025-27 Biennial Budget.
Prepared By: Oscar Santiago, Director
Approved Forwarded to Council
Attachments:
A. Attachment A - Successor Agency Resolution
B. Attachment B - Preliminary Official Statement
C. Attachment C - Continuing Disclosure Certificate