HomeMy WebLinkAbout8/18/2026 Item 7a, Floyd and Whittington - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: August 18, 2026
TO: Mayor and Council
FROM: Aaron Floyd, Public Works and Utilities Director
Prepared By: Shane Whittington, Utilities Business Manager
VIA: Whitney McDonald, City Manager
SUBJECT: Item #7a - APPROVAL OF PARTICIPATION IN THE NACIMIENTO
WATER PROJECT 2026 REVENUE REFUNDING BONDS
Since publication of the Council Agenda Report for Item 7a, APPROVAL OF
PARTICIPATION IN THE NACIMIENTO WATER PROJECT 2026 REVENUE
REFUNDING BONDS, staff received updated estimated savings from KNN Public
Finance based on current market conditions.
The Council Agenda Report included an estimated net present value (NPV) savings of
approximately $5.1 million, or 6.82%, based on market conditions as of June 29, 2026.
An updated estimate prepared as of July 30, 2026, reflects approximately $3.6 million, or
4.76%, in NPV savings.
Based on the updated estimate, the refunding would result in approximately $175,000 in
annual gross debt service savings attributable to the City. Actual interest rates and
savings will not be known until the bonds are priced and sold.
Item 7a - APPROVAL OF PARTICIPATION IN THE NACIMIENTO WATER PROJECT 2026 REVENUE
REFUNDING BONDS Page 2
The recommended action remains unchanged. Among other actions, the item authorizes
certain City representatives to complete the remaining steps necessary for issuance of
the 2026 Revenue Refunding Bonds. If market conditions deteriorate such that the
refunding no longer meets the City's minimum policy threshold of 3% NPV savings, the
San Luis Obispo County Financing Authority, San Luis Obispo County Flood Control and
Water Conservation District, participating agencies, and financing team may pause,
restructure, or cancel the transaction rather than proceed with a refunding that no longer
provides sufficient economic benefit.