By SDCN Editor
San Diego, CA–San Diego Association of Governments (SANDAG), serving as the San Diego County Regional Transportation Commission, successfully refinanced $433,355,000 in sales tax revenue in its role as the San Diego Regional Transportation Commission.
The transaction provides significant savings to the region and taxpayers, the organization said.
“SANDAG is pleased to be able to bring back these savings to families because this opens new opportunities to develop greater infrastructure projects that can transform our region,” said SANDAG Chief Financial Officer André Douzdjian. “Any time we are able to save taxpayers money, it is a win-win for everyone.”
The entire transaction will save the region approximately $40 million through 2042 or $29.5 million in present value terms. Proceeds from the Series 2023 Bonds were used to refund and fix-out all the Series 2008 variable rate bonds and a portion of the Series 2019A Bonds. In the process, SANDAG eliminated all risks related to long-term variable rate bonds and interest rate swaps, simplifying the bond portfolio, and lowering long-term borrowing costs.
The deal was very well received by investors and received over $1.3 billion in orders from 52 different investors wishing to purchase the bonds. The high investor interest allowed the agency to negotiate a favorable borrowing rate with the all-in true interest cost at 3.22% for the Series 2023 Bonds due in 2042.
Since the TransNet program’s inception, annual sales tax revenues have increased from $95.7 million in 1989 to $312.3 million in 2019. The original TransNet Program, which was adopted by county voters in 1987 and funded major transportation projects, expired in 2008.
In 2004, San Diego County voters approved a TransNet extension which began in 2008 and is set to continue for 40 years until 2048. The Ordinance and Expenditure Plan for the TransNet Extension includes funding for additional major highway, transit, and local street and road projects, as well as environmental mitigation, smart growth incentives, bicycle and pedestrian facilities, and related programs.