Santa Barbara, California, will tap the municipal bond market this week, largely to fund a recent police headquarters.
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Considered one of Southern California’s wealthy cities is tapping the municipal bond market to construct a recent police station and renovate an oceanfront park.
Santa Barbara — where the median home sells for roughly $2 million — is borrowing $124.2 million within the municipal bond market through its finance authority. The bonds are backed by lease payments town pays every year from its general fund, which is comprised of revenue including property and sales taxes, in addition to other tourism-related collections.
Town has been planning for a recent police headquarters for years, and voters approved a one-cent sales tax increase in 2017, which is able to help support the project.
The present facility was in-built 1959 for a staff of 85, which has grown to greater than 200 sworn and non-sworn officers. The station is outdated, too small, inefficient, and has never been retrofitted for earthquake, in line with the in line with town.
“It’s really a priority project for this community,” Keith DeMartini, town’s finance director, said in an interview, adding that town is coming to market “as quickly as we will.”
Local government infrastructure projects are generally paid for by revenue a city collects through property taxes or other forms of levies.
For wealthy enclaves — like Santa Barbara — where home values stretch into the thousands and thousands and attract beach-going tourists that spend money at hotels and restaurants, those collections are abundant. Town collected about $42 million of property taxes within the 2022 fiscal yr, roughly 53% greater than a decade earlier, in line with bond offering documents. That is been driven by a pointy increase in property values, that are poised to succeed in $29 billion in 2025, the documents state.
The lease-backed bonds are rated Aa2 by Moody’s Rankings, the third-highest level, and one notch below town, which was upgraded last month.
Moody’s lifted Santa Barbara’s bond rating one notch reflective of “town’s growing economy along the southern California coast with a robust tourism industry” and above-average resident income and very-strong assessed property value, in line with its Oct. 29 report.
Roughly $90 million of proceeds from the debt will likely be used to finance the brand new station, which will likely be built on land now used for a car parking zone and have amenities including a fitness center, shooting range and community space.
“Police departments have had a heck of a time hiring and retaining staff lately,” said DeMartini. “We truly imagine that this will likely be a very strong draw for people to want to come back work for our city.”
Roughly $13 million of the bond deal will likely be used overhaul a city park, referred to as Dwight Murphy Field, situated steps from the Pacific Ocean. The brand new park will feature multiple turf fields, an out of doors fitness gym and picnic areas.
The deal is anticipated to cost Wednesday through a competitive auction, in line with investor documents.