Title
Consider/Discuss/Act on a Resolution of the City Council of the City of McKinney, Texas, Relating To the “McKinney Economic Development Corporation Sales Tax Revenue Refunding Bonds, Taxable Series 2016” Approving (I) the Resolution of the Board of Directors of the McKinney Economic Development Corporation Authorizing the Issuance of Such Bonds and (Ii) Relating To the Deposit of the Gross Sales Tax Revenues; Resolving Other Matters Incident and Related To the Issuance of Such Bonds; and Providing an Effective Date
Summary
COUNCIL GOAL: Financially Sound Government
MEETING DATE: November 15, 2016
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Chief Financial Officer
Darrell Auterson, MEDC President
RECOMMENDED CITY COUNCIL ACTION:
• Approval of the resolution
ITEM SUMMARY:
• The McKinney Economic Development Corporation has the option to refund the Sales Tax Revenue Bonds, Taxable Series 2011, aggregating in principal amount of $6,910,000.
• Refunding bonds is similar to refinancing debt obligations to take advantage of lower interest rates.
• MEDC elected for private placement with a bank to reduce issuance costs and forego the bond rating process.
BACKGROUND INFORMATION:
• MEDC bylaws require City Council to approve the resolutions of MEDC relating to the issuance of all bonds, including refunding bonds.
• The current interest rate for the bonds ranges from 4.00% to 5.60% per annum.
FINANCIAL SUMMARY:
• The refunding will result in a fixed rate of 2.49% for a present value savings of approximately $797,000.
BOARD OR COMMISSION RECOMMENDATION:
• Approval of the resolution.