Transaction Details

Petaluma City Schools

Municipal

Lead Bookrunner

Delivering Cost-Effective Refunding Solutions Across Three Outstanding GO Bond Series

Background
The Petaluma City Elementary School District and the Petaluma Joint Union High School District operate under a common administration known as Petaluma City Schools (the District), collectively serving transitional kindergarten through 12th grade students. Located in southern Sonoma County, approximately 40 miles north of San Francisco, the combined districts serve an estimated 31,000 residents within the City of Petaluma and surrounding areas. For fiscal year 2025–26, Petaluma City Schools projects total enrollment of 7,473 students, with 2,570 attending the Elementary School District and 4,903 attending the High School District. The High School District is supported by eleven feeder elementary districts, including the Elementary School District.

Opportunity
The District sought to reduce long-term taxpayer costs by refinancing several outstanding Election of 2014 General Obligation bond series. With call dates approaching and market conditions offering an efficient window, Petaluma City Schools evaluated strategies to secure savings across both districts. The objective was straightforward: deliver measurable taxpayer benefit while supporting the District’s broader fiscal goals and maintaining flexibility across multiple series.

Market conditions reinforced the timing. Steady primary tone, balanced demand, and an unchanged AAA 5% curve created a predictable pricing environment. In the secondary market, MMD held flat from 2026 through 2055, preserving relative value and offering a constructive backdrop for refundings. Treasury yields were stable across key maturities, with ratios holding in the 65–88% range and little volatility affecting tax-exempts.

Solution
Baird partnered with Petaluma City Schools to design a multi-series financing plan that combined traditional refunding structures with forward-delivery mechanics. The coordinated effort resulted in three bond series:

• $12,630,000 2025 General Obligation Refunding Bonds (High School District)
• $4,485,000 2026 General Obligation Bonds (Forward Delivery) (High School District)
• $4,010,000 2026 General Obligation Refunding Bonds (Forward Delivery) (Elementary School District)

The plan was structured to capture favorable rates ahead of call dates, lock in long-term fiscal benefits, and reduce future debt service for both the Elementary and High School Districts through strategic use of refunding and forward-delivery features.

Implementation
The financing process brought together administrators from both districts, municipal advisors, and Baird’s California K-12 Public Finance team to refine the structure and ensure alignment with the District’s long-term goals. Forward delivery features were incorporated to provide timing flexibility, allowing the District to secure market performance in advance of call eligibility.

On the day of pricing, stable market conditions supported a smooth execution. Investor engagement remained consistent across the curve, with intermediate maturities seeing the strongest activity. Long-end accounts participated selectively but constructively, reflecting the overall market’s steady tone. The absence of volatility or directional pressure facilitated clean placements across all maturities.

Results & Impact
The issue delivered a cohesive, cost-effective solution spanning three unique series for two interconnected districts. By leveraging refunding opportunities and thoughtfully incorporating forward-delivery components, Petaluma City Schools secured more than $1,280,000 in projected taxpayer savings, net of all financing costs.

The financing reinforces the District’s long-term commitment to fiscal stewardship and the effective management of voter-approved General Obligation debt. It also highlights the value of disciplined execution during periods of market stability. Through collaboration between District leadership and Baird’s Public Finance and sales teams, Petaluma City Schools achieved a strong outcome that supports its educational mission while delivering meaningful taxpayer benefit.