Title
Conduct a public hearing and consider approving an ordinance on first and final reading with the caption reading: ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PFLUGERVILLE, TEXAS, LIMITED TAX AND REFUNDING BONDS, SERIES 2015; AUTHORIZING THE LEVY OF AN AD VALOREM TAX IN SUPPORT OF THE BONDS; APPROVING AN OFFICIAL STATEMENT, A PURCHASE AGREEMENT, AN ESCROW AGREEMENT AND A PAYING AGENT/REGISTRAR AGREEMENT; CALLING CERTAIN OBLIGATIONS FOR REDEMPTION AND AUTHORIZING OTHER MATTERS RELATED TO THE BONDS.
Summary
The issuance of these bonds will be used to begin the street and park projects authorized by citizens in the 2014 bond election and refund existing City debt. This is the first issuance related to the 2014 election, including approximately $10.2 million for street projects (of the $28 million authorized) and approximately $2 million for parks projects (of the $25 million authorized).
Current market conditions appear favorable to redeem certain bonds and refinance the outstanding principal at a lower interest rate. The decision whether or not to issue refunding bonds will be made at the time of the bond sale and will depend on the net present value savings calculated on market rates on that day.
The attached ordinance has been prepared by bond counsel. The pricing terms of the bonds will be finalized and incorporated into the ordinance on April 28th after the obligations have been priced. Moody's and Standard & Poors Investor Services will both assign ratings on this debt issuance. Moody's has upheld the City's A1 rating for this issuance. The Standard & Poors rating has not yet been received and will be reported at the Council meeting.
Mr. Terrell Palmer, the City's financial advisor, and a representative from the City's bond counsel will be in attendance to answer any questions that City Council may have.
Prior City Council Action
On March 10, 2015, the City Council approved a first draft of the Preliminary Official Statement. On April 14, 2015, the City Council approved a final draft of the Preliminary Official Statement.
Deadline for City Council Action
Approval of this ordinance will allow for the issuance of bonds and for the City to receive funds on May 27, 2015.
Fiscal Impact
The bonds have been structured with no payments due until February 2016 which will allow for funding as part of the 2016 budget. Although decisions regarding the distribution of the ad valorem tax revenues will be made during the budget process, based on FY15 information, the annual debt service on the general obligation bonds would equate to approximately 2.3₵ on the ad valorem tax rate. Any refunding debt issued would be paid from existing debt service allocations and would reduce future debt service payments.
Staff Recommendation
Conduct the public hearing and consider the ordinance on first and final reading to Award Sale of Certificates.
Drafter
Lauri Gillam
Assistant City Manager