Title
Consider/Discuss/Act on an Ordinance Authorizing the Issuance of “City of McKinney, Texas, Waterworks and Sewer System Revenue Refunding and Improvement Bonds, Series 2016”, and Delegating Matters Relating to the Sale and Issuance of Said Bonds to an Authorized City Official(s)
Summary
COUNCIL GOAL: Financially Sound Government
MEETING DATE: May 17, 2016
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Acting Chief Financial Officer
RECOMMENDED CITY COUNCIL ACTION:
• Approval of Ordinance
ITEM SUMMARY:
• The City is issuing new Waterworks and System Revenue Refunding and Improvement Bonds in the amount of $18,505,000 for various water and sewer related projects.
• The bonds are offered for sale in a competitive bidding process to be conducted electronically via PARITY through Wednesday, May 25, 2016 until 10:00 AM, Central time.
• The City has the option to refund in whole or in part the Waterworks and Sewer System Revenue and Refunding Bonds, Series 2006 aggregating in par amount of $10,710,000, and Waterworks and Sewer System Revenue Bonds, Series 2007 aggregating in par amount of $4,285,000
• Refunding bonds is similar to refinancing debt obligations to take advantage of lower interest rates.
• The current average interest rate for the bonds is 4.54% per annum.
• All arrangements necessary to notify the holders of such obligations of the decision to refund will be directed in accordance with the refunding provisions.
• Additionally, approval of this Ordinance will designate the Interim City Manager and Acting Chief Financial Officer as Pricing Officers to execute the transaction. This will enable pricing of the bonds at such time as the market conditions are most favorable.
BACKGROUND INFORMATION:
• Continuing growth drives the need for major capital improvements.
• Applications have been made to both Standard and Poor’s (S&P) and Moody’s Investors Services, Inc. (Moody’s) to review the bond rating.
• The 2006 Waterworks and Sewer System Revenue and Refunding Bonds and 2007 Waterworks and Sewer System Revenue Bonds were issued, sold and delivered subject to the right and authority of the City to refund them prior to maturity.
FINANCIAL SUMMARY:
• The total not to exceed principal amount for new issue and refunding is $36,000,000.
BOARD OR COMMISSION RECOMMENDATION: N/A