Agenda No. 8.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | February 18, 2025 |
| Department: | Finance |
| Subject: | Resolution 25-R-027 - Authorizing the Schertz/Seguin Local Government Corporation to issue debt for capital projects (S.Gonzalez/B.James/A.McBride/L.Busch/J.Walters) |
BACKGROUND
Consideration and approval of a resolution approving a bond resolution previously adopted by the board of directors of the Schertz/Seguin Local Government Corporation (SSLGC) authorizing the issuance of obligations designated as “Schertz/Seguin Local Government Corporation contract revenue improvement bonds, new series 2025”; acknowledging that these obligations will be sold pursuant to the provisions of a purchase contract; ratifying, reconfirming, and readopting the provisions of a regional water supply contract executed between the City of Schertz, Texas, the city of Seguin, Texas, and the Schertz/Seguin Local Government Corporation; authorizing the Mayor, the City Manager, and the City Secretary of the City of Schertz, Texas to execute on behalf of the City of Schertz, Texas all documents in connection with this transaction; and other matters in connection therewith.
The Schertz/Seguin Local Government Corporation (the “SSLGC” or the “Corporation”) was created on December 23, 1998 on behalf of the City of Schertz and Seguin to assist in acquiring water outside of the Edwards Aquifer. The Corporation was created by the Cities to operate a wholesale water system for the benefit of the two City’s Utility Systems. The Corporation has financed the construction of well fields and cross-country pipelines and today provides a reliable, drought-resistant water source. The Bonds are supported by Contracts between the Cities and the Corporation, and the liability is evenly split between the two Cities. Currently, the Corporation has $128,290,000 of Bonds outstanding that are supported by the two Cities. The proposed financing is intended to pay for a portion of the Fiscal year 2025 CIP including: Well projects, WTP Projects, WTP Surge tank, SCADA improvements and other larger capital improvement items.
The item tonight does not issue the bonds but authorizes SSLGC to proceed with the sale.
The Schertz/Seguin Local Government Corporation (the “SSLGC” or the “Corporation”) was created on December 23, 1998 on behalf of the City of Schertz and Seguin to assist in acquiring water outside of the Edwards Aquifer. The Corporation was created by the Cities to operate a wholesale water system for the benefit of the two City’s Utility Systems. The Corporation has financed the construction of well fields and cross-country pipelines and today provides a reliable, drought-resistant water source. The Bonds are supported by Contracts between the Cities and the Corporation, and the liability is evenly split between the two Cities. Currently, the Corporation has $128,290,000 of Bonds outstanding that are supported by the two Cities. The proposed financing is intended to pay for a portion of the Fiscal year 2025 CIP including: Well projects, WTP Projects, WTP Surge tank, SCADA improvements and other larger capital improvement items.
The item tonight does not issue the bonds but authorizes SSLGC to proceed with the sale.
GOAL
To authorize SSLGC to issue bonds for planned infrastructure improvements to the water system that serves Schertz, Seguin, and other local communities.
COMMUNITY BENEFIT
These infrastructure projects will continue to provide Schertz residents with reliable water both now and in the future.
SUMMARY OF RECOMMENDED ACTION
Staff recommends approval of Resolution 25-R-027
FISCAL IMPACT
The annual debt service related to the financing has been incorporated into the future rate structure as determined by the Corporation’s rate consultant, Willdan, and included in the Corporation’s rate study.
SAMCO Capital Markets, the City’s and the Corporation’s Financial Advisor, proposes selling the financing on or about March 5, 2025. The SSLGC Board authorized the parameter sale on January 16, 2025. The City of Seguin is authorizing the parameter sale resolution related to the financing on February 18, 2025. Only after both Cities approve the Resolutions can SSLGC proceed with the bond sale.
SAMCO Capital Markets, the City’s and the Corporation’s Financial Advisor, proposes selling the financing on or about March 5, 2025. The SSLGC Board authorized the parameter sale on January 16, 2025. The City of Seguin is authorizing the parameter sale resolution related to the financing on February 18, 2025. Only after both Cities approve the Resolutions can SSLGC proceed with the bond sale.
RECOMMENDATION
Staff recommends approving Resolution 25-R-027 with the motion provided by the bond council:
I MOVE THAT THE CITY COUNCIL APPROVE A RESOLUTION APPROVING A BOND RESOLUTION PREVIOUSLY ADOPTED BY THE BOARD OF DIRECTORS OF THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION AUTHORIZING THE ISSUANCE OF BONDS DESIGNATED AS “SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION CONTRACT REVENUE IMPROVEMENT BONDS, NEW SERIES 2025”
I MOVE THAT THE CITY COUNCIL APPROVE A RESOLUTION APPROVING A BOND RESOLUTION PREVIOUSLY ADOPTED BY THE BOARD OF DIRECTORS OF THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION AUTHORIZING THE ISSUANCE OF BONDS DESIGNATED AS “SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION CONTRACT REVENUE IMPROVEMENT BONDS, NEW SERIES 2025”