Subject
title
Introduction, and Possible Adoption, of a Bond Ordinance to Authorize the Competitive Sale of Tax-Exempt 2024A General Obligation Bonds in an Amount Not to Exceed $27,500,000 for the Purpose of Financing the Construction of Water, Sewer, and General Capital Improvements as Reflected in the city's FY 2025 Capital Improvements Program
end
Department
Finance
Recommendation
Staff recommends that the Mayor and Council introduce the attached ordinance authorizing the sale of tax exempt 2024A General Obligation Bonds.
If the Mayor and Council wish to proceed with adoption of the ordinance at the same meeting, the ordinance should first be introduced and then a motion should be made to waive the layover period. If the motion to waive the layover period is approved by six affirmative votes, a motion to adopt the ordinance may then proceed.
Discussion
Introduction and adoption of the attached ordinance (Attachment A) will allow staff to proceed with the sale of General Obligation Bonds to finance capital projects in accordance with the Mayor and Council's Capital Improvements Program (CIP). The projects to be financed with the bond proceeds, and the source of repayment, are listed in the table below.
|
Project Name |
Fund |
Source of Repayment |
|
F. Scott Fitzgerald Theatre ADA Improvements (RA20) |
Capital Projects |
Taxes and Governmental Revenues |
|
Lincoln Park Community Center Improvements (RA22) |
Capital Projects |
Taxes and Governmental Revenues |
|
Outdoor Recreation Pool Renovations (RC18) |
Capital Projects |
Taxes and Governmental Revenues |
|
Blue Plains Wastewater Treatment (UA21) |
Sewer |
User Fees and Charges |
|
Water Infrastructure and WTP Projects |
Water |
User Fees and Charges |
The bonds sold will have 20 year terms, with level principal repayment schedules. The level principal repayment schedules allow the outstanding principal to be repaid at a faster rate to minimize interest costs. The bond proceeds for all funds will cover project expenses for FY 2024 - FY 2025.
Mayor and Council History
The Mayor and Council adopted a resolution to declare the official intent of the Mayor and Council to bond finance these projects under U.S. Treasury Income Tax Regulation Section 1.150-2 prior to this item on May 6, 2024.
Fiscal Impact
The cost of issuance costs for the transaction will equal approximately $250,000 and will be paid from the proceeds of the bonds. The issuance costs cover the fees for the municipal advisor, bond counsel, underwriter, rating agencies, etc.
The bonds will be issued as General Obligation Bonds and will be backed by the full faith and credit of the city government. Although technically backed by the full faith and credit of the city government, the water and sewer portion of the bonds will be repaid through utility rates and charges.
Next Steps
Staff will work with bond counsel, the city's municipal advisor, and the rating agencies to market and sell the bonds. The bond sale is planned for September 25, 2024.