To: Mark R. Hafner, City Manager
From: Aaron Rector, Director of Finance
Subject:
Title
Consider adoption of an ordinance authorizing the issuance and sale of General Obligation Refunding Bonds, Series 2017, to refund outstanding obligations issued for various public improvements and to pay costs of issuance; levying an annual ad valorem tax and providing for the security for and payment of said bonds; approving the official statement; providing an effective date; and enacting other provisions relating to the subject.
Action Requested:
Consider adoption of an ordinance authorizing the issuance and sale of City of Keller, Texas General Obligation Refunding Bonds, Series 2017, to refund outstanding obligations issued for various public improvements and to pay costs of issuance.
Background:
The City’s financial advisors, Hilltop Securities, has identified an opportunity to reduce future debt obligations by refunding outstanding principal. By refunding an amount of $7.25 million on Keller General Obligation Bond Series 2009 and Certificates of Obligation Series 2009, the city is estimated a savings of $692,578.
The average interest rate for the bonds to be refunded, as mentioned above, is approximately 4.35%. The preliminary estimates project the average interest rate on the refunding bonds to be approximately 2.59%. The refunding will not extend the original maturity date of the existing certificates.
The principal amount of $7.250 million is subject to change because of market conditions. Final numbers will be received on Tuesday, July 18, 2017 and presented to the City Council at the July 18, 2017 Council meeting.
Budget Impact:
Due to timing, there is no budget impact in FY 2016-17.
Financial Considerations:
The estimating savings on the refunded bonds is approximately $692,578, or approximately $57,715 annually. Savings also include issuance costs.
Legal Review:
Bond counsel has prepared the ordinance.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
Consider adoption of an ordinance authorizing the issuance and sale of City of Keller, Texas General Obligation Refunding Bonds, Series 2017, to refund outstanding obligations issued for various public improvements and to pay costs of issuance.