ANAHEIM, Calif. (March 18, 2021) — Anaheim is considering issuing bonds to close budget deficits caused by the coronavirus economic downturn.
Anaheim’s City Council will consider borrowing up to $210 million on Tuesday in their role as the city’s Public Financing Authority. Bonds could be issued later this spring.
Issuing up to $210 million in bonds would generate $185 million in proceeds for the city after issuance costs.
Anaheim could opt to issue less in bonds, $162 million for proceeds of $140 million, to cover shortfalls for the current and next two years.
That would factor in receiving $107.6 million in federal assistance and the planned reopening of the theme parks of the Disneyland Resort, set for April 30.
The pandemic closure of Anaheim’s theme parks, the Anaheim Convention Center and sports and entertainment venues has driven the city’s current fiscal year deficit of $108.5 million as well as projected shortfalls in the next few years.
Under the federal American Rescue Plan Act, signed into law on March 11, Anaheim is set to receive assistance in two payments of $53.8 million each, one due in May and the second due in spring 2022.
The federal assistance covers about half of Anaheim’s deficit for the 12 months through June 2021 and about 87 percent of a projected deficit of $61.5 million for fiscal year 2021-2022, which begins in July 2021.
Borrowing is seen as a bridge for budget deficits until Anaheim’s visitor economy fully recovers in the coming years.
Anaheim projects deficits through June 2025, with economic recovery and revenue generated from it as variables.
The theme parks of the Disneyland Resort, which normally bring more than 25 million annual visitors to Anaheim, are expected to gradually reopen starting April 30.
Depending on where Orange County is in California’s colored, four-tier reopening system, the parks would open at either 15 percent or 25 percent capacity.
Anaheim is also awaiting state guidelines for the reopening of the Anaheim Convention Center and Honda Center. Both have been closed to either events or fans since March 2020.