To: MAYOR AND CITY COUNCIL
From: STEPHANIE MEYER, FINANCE DIRECTOR
TITLE
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DISCUSSION AND POSSIBLE ACTION REGARDING THE CITY’S MEASURE FP GENERAL OBLIGATION BOND SALE
RECEIVE AND FILE A REPORT ON THE RESULTS OF THE SALE OF $93,350,000 OF CITY OF REDONDO BEACH GENERAL OBLIGATION BONDS (FOR MEASURE FP PUBLIC SAFETY FACILITY IMPROVEMENTS)
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EXECUTIVE SUMMARY
In November 2024, Redondo Beach voters approved Measure FP, authorizing the City to issue up to $93,350,000 of general obligation (GO) bonds to fund the replacement and rehabilitation of the City’s Police and Fire facilities (Projects). Following the election, the City has actively pursued delivery of the Projects. On October 13, 2026, the City Council adopted a resolution approving the issuance of the Measure FP GO Bonds.
The Measure FP GO Bonds were sold on October 27, 2026 to Fidelity Capital Markets (Fidelity) in a competitive sale. The bonds were delivered on November 10, 2026. The bonds had a final true interest cost of 4.51% and a final maturity of September 1, 2056.
BACKGROUND
In 2024, the City Council reviewed various options to fund the reconstruction and renovation of critical City infrastructure and prepared a ballot measure to proceed with bond funded projects to improve the City’s police and fire facilities. On August 4, 2024, the City Council adopted Ordinance No. 3274-24 which formalized the authority and conditions under which Measure FP GO Bonds may be issued and placed Measure FP on the November 2024 ballot. On November 5, 2024, Redondo Beach voters approved Measure FP. The results of the election were certified on December 10, 2024, with 71.41% of residents voting in favor of the ballot measure.
Following the election, the City undertook efforts to plan for and to engage the necessary services to deliver the Projects. To date, the City has engaged Griffin Structures, Inc. as the City’s owner’s representative and program manager, and hired Swinerton Builders, Inc. as the design-build entity to deliver the Projects using the progressive design build delivery method. The Projects are currently in Phase 1 Design and progressing towards the establishment of guaranteed maximum prices for the various Police and Fire subprojects. Estimates for this work show that the entire $93,350,000 amount of Measure FP GO Bonds will be needed to complete the desired Projects.
The City also engaged a number of professional firms to serve as the financing team to issue the Measure FP GO Bonds. The financing team assisted City staff with the preparation of legal documentation to initiate and implement Bond issuance. On October 13, 2026, the City Council adopted Resolution No. CC-2610-086 which approved the form of the legal documents and authorized the issuance of the entire $93,350,000 amount of bonds in a competitive bond sale. The Resolution also specified that the bonds must have a true interest cost (TIC), which is a measure of the effective borrowing cost, of no more than 7% and a final maturity of no more than 30 years from their date of delivery.
Subsequently, the Measure FP GO Bonds were sold in a public competitive bond sale on October 27, 2026. The bonds were awarded to Fidelity, which offered the lowest TIC. The bonds were delivered on November 10, 2026, and the funds have been received by the fiscal agent on behalf of the City. The final structure of the bonds had a TIC of 4.51% and a final maturity of September 1, 2056.
Results of the Sale
The City received a total of 11 bids for the Measure FP GO Bonds. Fidelity provided the lowest bid with a TIC of 4.538%. The next best bid had a TIC of 4.545%, and the highest bid was for a TIC of 4.626%. The full results of the bid are shown in the following table, organized from the lowest to highest TIC.
Fidelity assembled a syndicate of large and small firms as partners to distribute the bonds. Their partners were Raymond James, Wedbush Securities, Advisors Asset Management, FHN Financial, SAMCO Capital Markets, Siebert Williams, and Zeus Financial.
Following the opening of bids, Public Resource Advisory Group (PRAG), the City’s Municipal Advisor, adjusted the bonds to generate the level annual debt service amortization structure. This restructuring adjustment reduced the TIC to 4.507%. Below is a comparison of the actual results in comparison to the estimates provided at the adoption of Ordinance No. 3274-24 in August 2024 and Resolution No. CC-2610-086 in October 2026. The actual results are better than these estimates by a notable margin, which will directly benefit Redondo Beach taxpayers.
Post-Issuance Activity
After the issuance of the Measure FP GO Bonds, the City reimbursed itself for $77,871 of Measure FP election and legal costs and approximately $1.5 million in project costs that were advanced by the General Fund.
With the bonds issued, the City will need to undertake certain post-issuance activities. These include:
• Invest the balance of the proceeds
• Ensure the proceeds are spent on the Project
• Report expenditures to the Measure FP Citizen’s Oversight Committee
• File reports in January and April of each year
• Pay debt service on 3/1 and 9/1 of each year
• Request an annual tax levy from LA County starting in FY 2027-28
• Set aside related property taxes
• Monitor refunding opportunities
This item provides an opportunity for PRAG, the City’s municipal / financial advisor, and City staff to present the results of the bond sale to the City Council.
COORDINATION
The Financial Services Department, City Treasurer’s Office, and the City Manager’s Office collaborated in preparing this report.
FISCAL IMPACT
There is no fiscal impact related to the items in this report. The debt service on the Measure FP GO Bonds will be paid from property taxes levied on the City’s property owners over the life of the bonds. The levy will be set as to be sufficient to pay the full amount of the final debt service. Prior to the levy, the debt service will be paid from bond proceeds.
APPROVED BY:
Mike Witzansky, City Manager