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Title:
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Issuance of Pledged Revenue Obligations (Revenue Bonds) Series 2025
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STRATEGIC OUTCOMES
ACTION
DEPARTMENT:
? Safe & Prosperous
? Motion
Finance
? Active & Appealing
? Resolution
? Respected & Responsible
? Ordinance - Introduction
DIVISION:
? Connected & Engaged
? Ordinance - Adoption
? Unique & Creative
? Public Hearing
TITLE:
title
Issuance of Pledged Revenue Obligations (Revenue Bonds) Series 2025
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SUMMARY RECOMMENDATION:
Summary Recommendation
Adopt an ordinance authorizing the issuance, sale, and delivery of Pledged Revenue Obligations (Revenue Bonds) Series 2025 to fund $72,000,000 infrastructure and community improvement projects in the FY 2026-2030 Capital Improvement Plan, refund prior obligations (bonds) if advantageous, and cover issuance costs, with final terms delegated to the City Administrator and Finance Director within Council-approved limits. (City Administration/Finance) (Jay Simonton/Doug Allen)
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STRATEGIC OUTCOME:
The issuance of Pledged Revenue Obligations (Revenue Bonds) advances the City Council's strategic outcome of Safe and Prosperous by investing in critical infrastructure and community improvements-roads, parks, downtown, municipal facilities, and public safety. This financing strategy reflects sound financial stewardship by leveraging favorable market conditions, spreading costs over time, and maintaining flexibility in the City's budget.
REPORT:
The municipal bond market is currently favorable for new borrowing and refinancing. Bonds are one of the primary tools cities use to finance major capital projects too large to be funded within a single year's revenue stream.
By issuing bonds, the City is able to complete large-scale improvements now-such as roads, parks, and public safety facilities-while spreading repayment into predictable annual costs over time. This approach allows the City to invest in long-term community needs while preserving cash reserves for emergencies and ensuring compliance with Arizona's Annual Expenditure Limitation (AEL).
The proposed ordinance authorizes the City to issue Pledged Revenue Obligations (Revenue Bonds) to take advantage of these conditions. Municipal bonds provide funding for major capital projects by allowing the City to borrow from investors and repay the debt over time. There are two primary types of municipal bonds:
* General Obligation Bonds, are generally repaid from property tax revenues and requires voter approval in the City of Yuma; and
* Pledged Revenue Obligation Bonds are repaid from specific revenues such as City sales taxes and state-shared revenues.
The obligations being proposed fall into the second category and will not constitute a general obligation bond and are not backed with property taxes.
The City will use proceeds of $72,000,000 to fund projects in the FY 2026-2030 Capital Improvement Plan for:
* Roadway improvements
* Park enhancements
* Revitalization of historic downtown
* Municipal facility projects and upgrades
* Public safety projects
Proceeds may also be used to refund prior revenue obligations (revenue bonds) if market conditions provide cost savings and to pay issuance expenses.
The obligations will be underwritten by Stifel, Nicolaus & Company, Incorporated, which previously underwrote the City's 2021 Public Safety Personnel Retirement System refinancing and the 2021 Desert Dunes Utility System Revenue Obligations. A trustee will be appointed through an indenture agreement to oversee the issuance. The obligations will be issued in book-entry form, with interest qualifying for tax-exempt treatment under federal law.
Because interest rates are volatile, the ordinance delegates authority to the City Administrator and Finance Director to finalize repayment schedules, maturities, callable features, credit enhancements, and aggregate principal within the limits set by Council. Final sale results, including interest rates and repayment schedules, will be reported back to City Council. Adoption of this ordinance is scheduled for October 1, 2025, with the bond sale expected in late November or early December 2025.
FISCAL REQUIREMENTS:
CITY FUNDS:
$ 0.00
BUDGETED:
$ 0.00
STATE FUNDS:
$ 0.00
AVAILABLE TO TRANSFER:
$ 0.00
FEDERAL FUNDS:
$ 0.00
IN CONTINGENCY:
$ 0.00
OTHER SOURCES:
$ 0.00
FUNDING: ACCOUNT/FUND #/CIP
n/a
TOTAL
$ 0.00
FISCAL IMPACT STATEMENT:
Issuance of these obligations will accelerate completion of much needed infrastructure projects; Issuing pledged revenue obligations will accelerate completion of critical infrastructure projects, provide predictable annual repayment costs, and preserve fund balances for unforeseen needs. This financing method also helps the City manage Arizona's Annual Expenditure Limitation, as both bond proceeds and repayments are excluded from the state-imposed spending cap.
Unspent bond proceeds will remain available in future fiscal years until the associated projects are completed.
ADDITIONAL INFORMATION:
SUPPORTING DOCUMENTS NOT ATTACHED TO THE CITY COUNCIL ACTION FORM THAT ARE ON FILE IN THE OFFICE OF THE CITY CLERK:
1. Ordinance
2. Preliminary Official Statement
3. Obligation Purchase Agreement
4. First Trust Agreement
5. First Purchase Agreement
IF CITY COUNCIL ACTION INCLUDES A CONTRACT, LEASE OR AGREEMENT, WHO WILL BE RESPONSIBLE FOR ROUTING THE DOCUMENT FOR SIGNATURE AFTER CITY COUNCIL APPROVAL?
? Department
? City Clerk's Office
? Document to be recorded
? Document to be codified
ACTING CITY ADMINISTRATOR:
DATE:
John D. Simonton
09/09/2025
REVIEWED BY CITY ATTORNEY:
DATE:
Richard W. Files
09/08/2025