Title
Ordinance in the Amount of $75,499,335 Amending the FY 17-18 Water Resources Enterprise Fund for Refinancing 2016 Revenue Bond Anticipation Note and Series 2009A Revenue Bonds
Body
Department: Financial & Administrative Services
Council District: All
Public Hearing: N/A
Advertising Date/By: N/A
Contact 1 and Phone: Richard Lusk, Finance Director 373-2077
Contact 2 and Phone: Tom Caruthers, City Attorney 373-2320
PURPOSE: To amend the Water Resources Enterprise Fund to provide appropriations in the amount of $75,499,335 to record the proposed August 2017 revenue bond issue to refinance a $43.3 million bond anticipation note issued April 2016 and $29.6 million Series 2009A Revenue Bonds.
BACKGROUND: In March 2016, the City authorized a $50.0 million Revenue Bond Anticipation Note (BAN) under an interest-only construction draw program. In June 2017 the City proposed to sell up to $110 million in fixed interest Revenue Bonds in July 2017, to refinance approximately $43.3 million borrowed under the note program, to issue approximately $27.2 million to fund additional water and sewer projects approved by City Council and that are currently under contract, and refinance $29.6 million water and sewer revenue bonds issued in 2009 to a lower interest rate.
On July 26, 2017 the City sold the Series 2017A revenue bonds of approximately $70.5 million with an average fixed interest cost of 3.27% over their 30-year term. It also sold the Series 2017B revenue refunding bonds (refinancing $29.6 million bonds issued in 2009) with an average fixed interest cost of 2.16% over their remaining 14-year term. The outstanding 2009 bonds have an average interest rate of 4.75% and refinancing the interest rate to 2.16% will result in an estimated savings of $5.3 million (about $420,000 per year over the remaining 14-year term of the bonds). This bond financing will close on or about August 17, 2017.
The revenue bonds will be issued pursuant to a supplemental trust agreem...
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