Title
Consider/Discuss/Act on All Matters Incident and Related to the Issuance and Sale of “City of McKinney, Texas, General Obligation Refunding Bonds, Series 2025B”, Including the Adoption of an Ordinance Authorizing the Issuance of Such Bonds, Establishing Parameters of the Sale of Such Bonds and Delegating Certain Matters to an Authorized Official(s) of the City
Summary
COUNCIL GOAL: Financially Sound Government
4A: Provide funding and organizational framework to ensure continual economic improvements
MEETING DATE: March 18, 2025
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Chief Financial Officer
RECOMMENDED CITY COUNCIL ACTION:
• Approval of Ordinance
ITEM SUMMARY:
• The City has the option to refund in whole or in part the General Obligation and Refunding Bonds, Series 2014 and the General Obligation Bonds, Series 2015.
• The aggregate par amount of the bonds shall not exceed $29,200,000.
• The maximum true interest cost shall not exceed 5.00%
• Refunding bonds is similar to refinancing debt obligations to take advantage of lower interest rates.
• The refunding must produce a net present value debt service savings of at least 3% of the refunded bonds.
• The term of the refunding bonds shall not exceed 10 years.
• Additionally, approval of this ordinance will designate the City Manager, Chief Financial Officer and Director of Finance 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:
• 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 2014 General Obligation and Refunding Bonds 2015 General Obligation Bonds were both issued, sold and delivered subject to the right and authority of the City to refund them prior to maturity.
FINANCIAL SUMMARY:
• Total debt savings anticipated of 9% - 10%
• Total not to exceed amount for refunding is $29,200,000
BOARD OR COMMISSION RECOMMENDATION: N/A