Title
Approving a Resolution Directing the Publication of Notice of Intention to Issue City of Pflugerville, Texas, Combination Tax and Revenue Certificates of Obligation, and Other Matters Related Thereto. (Tax-exempt Certificates of Obligation, Series 2016A)
Summary
This is the first step in the process of issuing debt to finance projects approved by the City Council. The proposed certificates of obligation will be used to fund land acquisition, roadway, park, and facility improvement projects and police software. By approving this resolution, the City is not bound to the issuance of certificates of obligation. However, if issued, the total amount cannot exceed $9,380,000, as stated in the attached resolution, prepared by Richard Donoghue, bond counsel. This amount includes all project and bond issuance costs.
The projects outlined in the attached summary include roadway, park, and facility projects and acquisition of land and software. Roadway projects include the design of roadway along the SH 45 frontage road and the construction of four traffic signals. Improvements to two park restroom facilities (Gilleland and Pfluger) and renovations to the Gilleland Pool House and Bohls House comprise the park projects. Facility improvements include Phase I of the Animal Shelter expansion at the current location and construction of a field crew building for Public Works (general fund portion only, the utility fund will match this amount as proposed in the fiscal year 2017 budget). Land acquisition includes property near the Justice Center for future expansion which is being considered later on this agenda. Finally, a CAD/RMS software system for the Police Department will be included in the issuance at a five year payout, to more closely match the potential life of the asset.
These certificates of obligation will be issued in conjunction with additional certificates of obligation (taxable and tax-exempt) for the Pflugerville tax increment reinvestment zone (TIRZ) #1, general obligation bonds funding projects approved by Pflugerville voters in 2014 and 2015, and potentially refunding bonds. The Series 2016B (tax-exempt) and 2016C (taxable) certificates of obligation reimburse projects related to the Pflugerville TIRZ #1 and the Notice of Intent to issue for those certificates of obligation are included as subsequent agenda items. The City will also be issuing general obligation (limited tax) bonds not to exceed $13,438,000 and $18,437,000 for roadway and parks projects, respectively, $31,875,000 in total. This represents the second issuance of the November 2014 bond election and the first issuance of the November 2015 bond election. Voters approved the issuance of $28 million for roadway projects and $25 million for parks projects in the 2014 bond election and just under $12 million of those funds were issued in 2015. In a November 2015 bond election, an additional $9.5 million was approved by voters for Weiss Lane roadway improvements and no funds have been issued to date. Staff is working with the financial advisor to continue to evaluate the potential for refunding current debt and no action is currently needed on the refunding issuance.
Mr. Terrell Palmer, of Hilltop Securities (formerly First Southwest), will be working with the City as the financial advisor for this transaction. Mr. Richard Donoghue, of McCall, Parkhurst, and Horton, will be working with the City as bond counsel. Mr. Donoghue will be at the City Council meeting to answer any questions you may have.
Deadline for City Council Action
In order to close on the bonds and receive the funds by July 27, 2016, this resolution must be approved on May 10, 2016.
Projected Future City Council Action
At this meeting, City Council will also be requested to approve a resolution "Expressing Official Intent to Reimburse Certain Expenditures" related to this issuance.
The next action to be taken by the City Council will be on June 14, 2016, to approve the preliminary official statement and consider authorizing an issuance to refund existing debt.
On June 28, 2016, Council will conduct a public hearing and award the sale of the certificates.
A tentative financing schedule is attached to this agenda item.
Fiscal Impact
The bonds have been structured such that the first payment is due in February 2017. The police software has been included in the CO issue on a 5 year payment schedule to more closely match the potential life of the asset. Based on FY17 information received from Travis Central Appraisal District regarding the estimated assessed valuation for the upcoming year, annual payments on the certificate of obligation bonds would equate to 1.78₵ on the ad valorem tax rate and the roadway and parks general obligation (limited tax) bonds would equate to 2.97₵ on the ad valorem tax rate in fiscal year 2017, increasing to an estimated 4.29₵ beginning in fiscal year 2018. The TIRZ related bonds will not affect the City's property tax rate, as those certificate of obligation bonds will be funded by TIRZ funds already set aside for that purpose.
Staff Recommendation
Approve the resolution.
Drafter
Lauri Gillam
Assistant City Manager