Public Agency:

Yuba City Water Agency Logo Yuba County Logo

Bond, Consulting or Both:

Practice Areas:

NHA Contributions: NHA helped in creating the financial structure and designing legal and credit structures that worked for both the County and Agency. NHA also obtained a private credit assessment for the transaction from S&P Global Ratings to provide the Agency with comfort of the future liquidity for its investment.

Project Completion: May 2019

NHA Contact: Mark Northcross and Rob Schmidt

Yuba County Road Improvements

Unique Characteristics of Project: NHA was retained by the Agency to work with the County to structure a debt obligation secured by County SB 1 revenues suitable as a long-term investment for the Agency’s cash reserves.

Executive Summary:

In 2017, the California legislature passed Senate Bill No. 1 (SB 1), a comprehensive transportation funding bill, which results in significant additional gas tax revenue for the County. Annual Road Maintenance and Rehabilitation Account (RMRA) revenues were pledged as security for principal payments and the County general fund was pledged as security for interest payments.

Following the defeat of Proposition 6, a 2018 attempt to repeal SB 1, County and Agency staff explored the idea of advance funding a significant portion of road rehabilitation work using anticipated RMRA revenues. A proposal was developed for the Agency to advance $9 million to the County for ten years at a 2.25% interest rate.

This transaction accomplished several objectives, including:

  1. Cost savings to the County of up to $4 million by advance funding this road work resulting in a “bulk discount” and avoiding inflationary adjustments, escalating construction costs, and further deterioration of roads.
  2. County residents realize an immediate and vast improvement to some of the local road network, helping to reduce car maintenance costs.
  3. For the Agency, this transaction provided a guaranteed fixed rate of return over 10 years.