Meeting_Body
MEASURE R INDEPENDENT TAXPAYERS OVERSIGHT COMMITTEE
MARCH 9, 2026
Subject
SUBJECT: MEASURE R BONDS
Action
ACTION: MAKE A FINDING THAT THE BENEFITS OF A DEBT FINANCING EXCEED ISSUANCE AND INTEREST COSTS
Heading
RECOMMENDATION
Title
ADOPT a resolution (Attachment A) which finds, in accordance with Section 8(i)(4) of the Measure R Ordinance, that the benefits from the proposed financing for accelerating project delivery, avoiding future cost escalation and related factors exceed issuance and interest costs.
Issue
ISSUE
The Measure R Ordinance requires that the Measure R Independent Taxpayers Oversight Committee of Metro ("Measure R Oversight Committee") "review all proposed debt financing and make a finding as to whether the benefits of the proposed financing for accelerating project delivery, avoiding future cost escalation, and related factors exceed issuance and interest costs".
Background
BACKGROUND
To date, Metro has paid or plans to pay approximately $585 million in project costs, projected to be reimbursed by proceeds from long-term debt financing. This standard practice approach is a critical role of the treasury function and is utilized to avoid project delivery delays and ensure that Metro's relationships with project delivery entities remains in good standing.
Discussion
DISCUSSION
The proposed issuance of $585 million of tax-exempt fixed-rate bonds ("New Money Bonds") is needed to reimburse the previously paid or planned to be paid project expenses. This issuance would confer several benefits, including aligning the useful life of the assets with life of the debt, ensuring that the repayment schedule matches the period during which the assets provide value, and preventing the misalignment of short-term cash demands with long-term assets. The conventional reimbursement approach coupled with the management of cash balances is utilized to avoid project delivery delays and ensures that Metro's relationships with project d...
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