Title
Ordinance in the Amount of $30,400,000 Amending the FY 15-16 Water Resources Enterprise Fund for Refinancing of a 2014 Revenue Bond Anticipation Note
Body
Department: Finance and Legal
Council District: All
Public Hearing:
Advertising Date/By:
Contact 1 and Phone: Richard Lusk, Finance Director, 373-2077
Contact 2 and Phone: Tom Carruthers, City Attorney, 373-2320
PURPOSE:
To amend the Water Resources Enterprise Fund to provide appropriations in the amount of $30.4 million to record the proposed January 2016 revenue bond issue to refinance a $30.0 million bond anticipation note issued February 2014.
BACKGROUND:
In February 2014, the City authorized a $30.0 million Revenue Bond Anticipation Note (BAN) under an interest-only construction draw program, with the short-term note to be redeemed by March 2017. The City proposes to sell up to $32.0 million in Revenue Bonds in January 2016, to refinance $30 million borrowed under the note program, for the purposes below. The revenue bonds are expected to have an average fixed interest cost of less than 4.00% over their 30-year term. The revenue bonds will be issued pursuant to a supplemental trust agreement with U.S. Bank (bond trustee) and a bond purchase agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Bank of America) and Loop Capital Markets LLC.
The proposed bond issue consists of refinancing a $30.0 million bond anticipation note issued in 2014 for various water and sewer system improvements, including replacement of incinerator no. 1 and the initial phase of upgrades to the TZO Wastewater Treatment Plant to meet regulations regarding biologic nutrient removal.
The bonds are being issued for the following purposes:
Wastewater System Improvements $22,521,000
Water System Improvements 7,479,000
Costs of Issuance 400,000
Total $30,400,000
In December, the City Council will be asked to authorize additional related upgrades funded through the issuance of a revenue bond anticipation note of $50.0 million, the second note in a series of five BANs for the $165 million in proposed bond funded capital projects scheduled between 2014 and 2019.
BUDGET IMPACT:
Annual debt service on the $30.0 million revenue bonds will be paid from the Water Resources Fund budget, projected at $1.7 million annually over the next 30 years.
RECOMMENDATION / ACTION REQUESTED:
The Finance and Legal Departments recommend approval of the attached ordinance in the amount of $30.4 million to provide appropriations to record the refinancing of the 2014 $30.0 million bond anticipation note.
COMMITTEE ACTION: This item was referred to Council by the General Government Committee.