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TO: |
Local Advisory Council |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, Chief Financial Officer |
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PRESENTER(S): |
Viola Miller, Chief Financial Officer |
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Brian Reeves, Associate Chief Financial Officer |
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Brian Baker, Senior Vice President, Zions Public Finance |
TITLE:
title
Consultation on Issuance, Tender and Refunding of the Authority’s Sales Tax Revenue Bonds
end
AGENDA ITEM TYPE:
LAC - Consultation
RECOMMENDATION:
The Local Advisory Council is encouraged to provide feedback to the Authority’s Board of Trustees on the opportunity to issue bonds for the purpose of funding critical capital projects and refunding outstanding bonds.
BACKGROUND:
As of December 31, 2024, UTA has approximately $2 billion in outstanding senior and subordinate sales tax revenue bonds. These bonds play a crucial role in funding UTA’s transit services across a six-county region, supporting bus, light rail, commuter rail and other operations. Many of these services rely on sales tax revenue bonds to supplement capital funding.
As part of the TRAX Forward project, which aims to enhance and expand service over the next decade, UTA has selected Stadler to manufacture new light rail vehicles to replace and grow its existing fleet. Additionally, with expanded transit services in the Ogden area, UTA needs to invest in infrastructure improvements, including new bus canopies and facility upgrades. These capital projects require supplemental funding through targeted bond issuances.
UTA has also identified opportunities to optimize its existing debt profile by refinancing outstanding bonds to reduce overall debt service costs. This can be achieved through two key methods: first, by conducting bond tenders, a strategy UTA has successfully executed twice; and second, by refunding certain taxable bonds with tax-exempt bonds to secure more favorable financing terms
DISCUSSION:
UTA’s staff and Municipal Advisor, Zions Public Finance, will present information for three financing strategies to fund new capital projects, tender existing debt outstanding, and refunding taxable bonds with tax exempt bonds.
ALTERNATIVES:
This proposal is subject to available capital markets, potential investor appetite and UTA’s bond investors’ willingness to tender bonds.
Should the Authority not pursue these funding opportunities, the planned capital projects to replace and grow UTA’s fleet and infrastructure improvements will be delayed, impacting timely delivery of service.
FISCAL IMPACT:
New issuance target total of approximately $212 million bonds with two bond issuance targets of $128 million in 2025 and $84 million in 2028.
For tendered bonds, an aggregate net present value savings of at least $5 million and a target 3-5% range.
Refunded bonds, an aggregate net present value savings amount of at least $1 million and a target 1-3% range.
ATTACHMENTS:
None