To: Mayor and City Council
From: Aaron Rector, Interim City Manager
Subject:
Title
Consideration and action regarding a resolution directing publication of notice of the City's intention to issue combination tax and revenue certificates of obligation to provide funds for street improvements and related issuance costs.
Action Requested:
Consider action regarding a resolution directing publication of notice of the City's intention to issue combination tax and revenue certificates of obligation to provide funds for street improvements and for related issuance costs.
Background:
The certificate of obligations (COs) issuance would be for an amount not to exceed $15,000,000 and will fund the Elm street reconstruction project. The proposed COs will be paid from ad valorem and has been included in the current tax rate. The COs will be issued as fifteen-year debt obligations. The anticipated asset life of the projects is anticipated to be at least twenty years which complies with the City’s financial policy requirement that debt obligations not exceed the asset life. The proposed debt structure fits within the City’s long-term financial plans and needed for long-term debt capacity management.
The resolution provides authorization to reimburse itself for expenditures made prior to the tax-exempt financing. The debt funding will be included on the July 16 agenda and the related 2024 Certificates of Obligations funds should be received around August 13th. A reimbursement authorization is included to cover any potential cash-flow gaps prior to receipt of the funds.
Financial Impact:
FY 2023-24 budget included an estimated annual payment of $1,420,817 for the proposed debt based upon an issuance of $15,000,000 at 4.75% interest rate. The proposed issuance has an estimated annual payment of $1,352,632.
Citizen Input/Board Review:
N/A
Legal Review:
Bond counsel has prepared the notice of intent resolution.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
Consider action regarding a resolution directing publication of notice of the City's intention to issue combination tax and revenue certificates of obligation to provide funds for street improvements and for related issuance costs.