REPORT TO THE CITY COUNCIL
FROM: SANTINO DANISI, Finance Director/City Controller
Finance Department
BY: KALEB NEUFELD, Assistant City Controller
Finance Department
SUBJECT
Title
Actions pertaining to issuance and sale of Series 2025 Lease Revenue Bonds for Public Safety projects:
1. ***RESOLUTION - Approving the issuance by the Fresno Joint Powers Financing Authority of lease revenue bonds in a principal amount not to exceed an aggregate $60 million, authorizing the execution and delivery of a master facilities lease, a master facilities sublease, a bond purchase agreement, an official statement and a continuing disclosure certificate; and authorizing execution of documents and the taking of all necessary actions relating to the financing. (City action) (Requires 5 affirmative votes) (Subject to Mayor’s veto)
2. RESOLUTION of the Fresno Joint Powers Financing Authority authorizing the issuance and sale of Lease Revenue Bonds (Public Safety Projects) series 2025, authorizing the execution and delivery of a trust agreement, a master facilities lease, a master facilities sublease, a bond purchase agreement, and an official statement, and authorizing the taking of all necessary actions relating to issuance of the bonds. (Joint Powers Financing Authority action)
3. ***RESOLUTION - Authorizing the release of facilities and amendment of the Master Facilities Lease and Master Facilities Sublease relating to the Fresno Joint Powers Authority lease revenue bonds and approving the taking of all necessary or desirable actions in connection therewith. (City action) (Requires 5 affirmative votes) (Subject to Mayor’s veto)
4. RESOLUTION of the Fresno Joint Powers Financing Authority authorizing the release of facilities and amendment of the Master Facilities Lease and Master Facilities Sublease relating to the Fresno Joint Powers Authority lease revenue bonds and approving the taking of all necessary or desirable actions in connection therewith. (Joint Powers Financing Authority action)
Body
RECOMMENDATION
Staff recommends adoption of the resolutions contained herein authorizing the issuance and sale of Lease Revenue Bonds in an aggregate amount not to exceed $60 million to support the construction of various public safety projects, and authorizing the execution and delivery of a master facilities lease, a master facilities sublease, a bond purchase agreement, an official statement and a continuing disclosure certificate; and authorizing execution of documents and the taking of all necessary actions relating to the financing. Additionally, to adopt the resolutions authorizing the release of the Municipal Service Center and amendment of the 2017 Master Facilities Lease and Master Facilities Sublease relating to the Fresno Joint Power Authority lease revenue bonds.
EXECUTIVE SUMMARY
The City of Fresno is seeking to obtain financing for the construction and improvements of various Public Safety Facilities (as detailed below). Staff are requesting that the Fresno Joint Powers Financing Authority authorize, and the City of Fresno approve, the issuance and sale of lease revenue bonds, Series 2025, for this purpose in an amount not to exceed an aggregate of $60 million. The new bonds will have a true interest cost not to exceed 5.50 percent and will mature no later than April 1, 2055. Staff also recommend authorization, execution and delivery of all documents, and the taking of all necessary actions relating to the financing.
BACKGROUND
Through previous Council action, the City of Fresno has executed a series of activities aimed at improving and providing state-of-the-art facilities to support public safety services for the community. Financing proceeds will be utilized to construct a new Fire Station No. 12, a new 911 Emergency Call Center and capital improvements to a new Police Headquarters.
On June 13, 2024, Council adopted Resolution 2024-119 declaring the official intent to use proceeds of future indebtedness to reimburse the City for certain expenditures related to the construction of a new Fire Station No. 12. Subsequently, on February 27, 2025, a construction contract was awarded to Solpac Construction Inc. dba Soltek Pacific Construction Company of San Diego, California for the Fire Station No. 12 project.
Fire Station No. 12 will be located at Ashlan Avenue and Valentine Avenue and will be significantly larger than the existing station located at 2874 West Acacia Avenue, helping the Fire Department meet incident response time objectives and provide essential emergency services to the growing northwest portion of Fresno. The 15,842 square foot, single-story building will contain four bays for fire apparatus, turnout and equipment rooms, living quarters, recreation space, office space for 11 personnel, and a public lobby.
On April 10, 2025, Council adopted Resolution 2025-89 declaring the official intent to use proceeds of future indebtedness to reimburse the City for certain expenditures related to the construction of a new 911 Emergency Call Center and to award a construction contract to Solpac Construction, Inc. dba Soltek Pacific Construction Company of San Diego, California.
The 911 Emergency Call Center will help the Police Department meet the performance goal of answering 90% of all calls within 15 seconds by providing space for additional phone and radio operators. The 12,072-square-foot building will be located on a 1.25-acre project site in the eastern portion of the City’s Municipal Service Center. The 911 Emergency Call Center will consist of a single-story building with a large call center space, office space for managers and supervisors, a conference room, a training room, breakrooms, restrooms, an exercise and fitness room, a server room, an electrical room, and an outdoor courtyard. The 911 Emergency Call Center will be operational 24 hours a day, every day of the calendar year, and will be operated and maintained by the Fresno Police Department. Operation of the 911 Emergency Call Center will involve transferring certain existing operations from the police department.
Lastly, the City intends to enter into a lease agreement with an option to purchase a facility for a new Police Headquarters. Located at 2314 Mariposa Street, the three-story building offers 63,035 square feet with a basement area and parking. The facility will be utilized as the Police Department Headquarters through relocation from the current facility. Financing proceeds will be utilized for interior buildouts and other tenant improvements for the facility.
The projects will be financed through the issuance of Lease Revenue Bonds, secured by a master lease agreement with the bond maturity occurring on April 1, 2055. Staff anticipates selling the bonds in August, with a close of the sale by mid-September. The authorizing resolution includes an exhibit summarizing good faith estimates, reflecting current market conditions, of the true interest cost, net proceeds and total debt service payments related to the bonds.
The construction of the 911 Emergency Call Center will require the release of the Municipal Service Center, currently subject to the City’s existing Master Lease securing bonds previously issued by the Authority. Resolutions of the City and the Authority would authorize amendments to existing Master Lease documents necessary to effectuate that release.
The City’s internal financing team is supported by external professionals rounding out the team comprised by staff from Orrick in the role of Bond Counsel, ArentFox Schiff as Disclosure Counsel, KNN Public Finance as Municipal Advisor and Loop Capital Markets serving as Underwriter for the 2025 Bonds.
ENVIRONMENTAL FINDINGS
This item is not a project of the City of Fresno and as such, the California Environmental Quality Act requirements are not applicable.
LOCAL PREFERENCE
Local preference was not considered because the resolutions do not include a bid or award of a construction or service contract.
FISCAL IMPACT
Annual debt service is currently estimated in the range of $3.85 million to $3.95 million, with approximately 51% funded from Police and Fire impact fees, and 49% funded from the General Fund. Annual debt service is subject to changes in market conditions prior to the day of sale and will adjust as a result. Debt service payments commence October 1, 2029.
Attachments:
City Council Resolution - Authorizing Issuance
Joint Powers Financing Authority Resolution - Authorizing Issuance
Good Faith Estimates
Master Facilities Lease
Master Facilities Sublease
Master Trust Agreement
City Council Resolution - Master Lease Release
Joint Powers Financing Authority - Master Lease Release
Amendment to Master Facilities Lease
Amendment to Master Facilities Sublease
Consent of Bond Insurer
City Certificate
Continuing Disclosure Certificate
Bond Purchase Agreement
Preliminary Official Statement