Saving money for residents in the Bay Area
An innovative bond transaction between Wells Fargo and Contra Costa County, California, will fund health services projects and save local taxpayers more than $9.1 million.
A nearly $100 million lease revenue bond will help Bay Area residents in Contra Costa County, California, enhance their health services department and reduce county debt, thanks in part to an “innovative agreement with Wells Fargo” that is expected to save local taxpayers more than $9.1 million, county officials said.
The $99.8 million bond transaction, which refinanced a portion of Contra Costa County’s bonds, will fund capital projects within the health services system — including its hospital and clinic system — and will also be used to refinance existing county bond debt, county officials reported in a news release (PDF).
Federal D. Glover, chair of the County Board of Supervisors, said in a statement that the transaction with Wells Fargo ultimately “means more tax dollars are available to provide services to our residents.”
The bond transaction is also significant for Wells Fargo, which has received negative media attention related to sales practices and the Dakota Access Pipeline. The public scrutiny has been particularly concentrated in this part of the country, and particularly aimed at the company’s Government & Institutional Banking group in Wholesale Banking, due to the group’s focus on serving federal, state, regional, and local governments governed by elected officials and supported by taxpayers.
It was this Government & Institutional Banking group that made the bond transaction with Contra Costa County possible.
“In a region of the country where we have business bans and aggressive negative headlines from elected officials, the team persevered to deliver a compelling solution,” said Phil Smith, head of Government & Institutional Banking. “Congratulations to the client team on this against-all-odds victory!”
Banking relationship spans the decades
Contra Costa County has relied on the Wells Fargo team for its guidance and innovative solutions for more than 40 years. The county uses Treasury Management, Public Finance, and other key banking services at Wells Fargo.
While the county had originally planned a public bond offering to fund its capital projects, it instead opted for a nearly $100 million direct purchase solution proposed by Wells Fargo. This innovative approach allowed the county to close the fixed-rate refinancing quickly, avoiding the time and expense of drafting a public offering document and waiting for required reviews by the bond rating agencies.
“Wells Fargo has served Contra Costa County for many years, and our team has been proactively showing the county financing and refinancing ideas,” said Nikolai Sklaroff, a public finance investment banker in Government & Institutional Banking. “We were pleased to help continue to build a strong relationship with the county by providing this innovative refinancing solution that helped the county execute this transaction quickly and efficiently in a rising interest rate environment.”
Contributing to this transaction and the strong client relationship are Government & Institutional Banking Relationship Manager Shelley Rintala, Portfolio Manager Bradley Schroeder, Capital Strategies Specialist Readie Callahan, and Public Finance Banker Chintan Dholakia.
“We are delighted to have a satisfied customer,” said Sklaroff, “and it was refreshing to see some positive press coverage in the Bay Area while we work through this challenging period.”