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Municipal Improvement Corporation of Los Angeles (MICLA) / Lease Revenue Bonds / Series 2026-A (Capital Equipment and Real Property)

Council File 26-0016

Introduced
2026-01-08
Last changed
2026-02-04
Status
open
Expires
2028-01-23
Initiated by
City Administrative Officer
References
City Administrative Officer Report: 0220-05291-1800City Attorney Report: R26-0032

Brief

The City Administrative Officer and City Attorney brought forward a Municipal Improvement Corporation of Los Angeles (MICLA) lease revenue bond issuance (Series 2026-A) to fund capital equipment and real property acquisitions. The Budget and Finance Committee approved the item on January 20, 2026. The full Council adopted it on January 28, 2026 by a vote of 14-0-1. The ordinance became effective February 6, 2026.

Full summary

This file authorizes the City to issue up to $255 million in lease revenue bonds through MICLA, the City's primary financing vehicle for capital purchases, with the proceeds used specifically to refinance outstanding MICLA commercial paper notes that had previously funded the acquisition of capital equipment and the acquisition and improvement of real property. Rather than a new capital spending authorization, this is a refinancing: the short-term commercial paper notes are retired and replaced with longer-term bonds carrying a structured repayment schedule. The bond structure works through a lease-leaseback arrangement. The City leases certain real properties to MICLA, which in turn leases them back to the City. The lease payments the City makes to MICLA are the security for the bonds. Two ordinances were adopted as part of this action: one approving the lease-leaseback of those real properties, and a second amending the Los Angeles Administrative Code to create a new special fund to record the accounting transactions associated with the bonds. The City Controller was also directed to create a dedicated account within the Capital Finance Administration Fund to track future lease payments. The City Administrative Officer reported that debt service on the bonds will average approximately $15.9 million per year over a 20-year term running through May 1, 2046, with total principal and interest estimated at roughly $318.8 million. Payments are due semi-annually on April 15 and October 15, beginning in Fiscal Year 2026-27. The CAO confirmed the issuance keeps the City's non-voter-approved debt ratio well within the six percent of General Fund revenues ceiling required by City financial policy, with the ratio projected at 2.40 percent in FY 2025-26 and 2.73 percent in FY 2026-27. The CAO initiated the file on January 8, 2026, and the City Attorney submitted supporting ordinances the following day. The Budget and Finance Committee approved all recommendations on January 20, 2026, with members Yaroslavsky, Hutt, McOsker, and Hernandez voting yes and Blumenfield absent. The full Council adopted the item on January 28, 2026, by a vote of 14-0-1. Council action became final on February 3, 2026, and both ordinances were posted and published on February 4, with effective dates of February 6 and March 9, 2026 respectively.

Activity (12)

  • 2026-02-04 Ordinance posted/published. Ordinance effective date: February 6, 2026.
  • 2026-02-04 Ordinance posted/published. Ordinance effective date: March 9, 2026.
  • 2026-02-03 Council action final.
  • 2026-01-28 Council adopted item forthwith.
  • 2026-01-28 City Clerk transmitted file to Mayor. Last day for Mayor to act is February 9, 2026.
  • 2026-01-23 City Clerk scheduled item for Council on January 28, 2026.
  • 2026-01-20 Budget and Finance Committee approved item(s) .
  • 2026-01-16 Budget and Finance Committee scheduled item for committee meeting on January 20, 2026.
  • 2026-01-13 City Attorney document(s) referred to Budget and Finance Committee.
  • 2026-01-09 Document submitted by City Attorney, dated January 9, 2026.
  • 2026-01-08 City Administrative Officer document(s) referred to Budget and Finance Committee.
  • 2026-01-08 Document submitted by City Administrative Officer, dated January 8, 2026.

Documents (12)

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