The City has two outstanding Bonds ($4,435,000 of the GO Bond Series 2012 and $2,120,000 CO’s Series 2013) that will become callable on February 1, 2022.   As in the past, when the City has callable bonds that can be refunded for interest rate savings, the City has replaced the bonds with higher interest rates with lower interest rate bonds. In this instance we expect the savings will be approximately $475,000.   Savings generated from the refunding will benefit both the I&S Fund and the Utility Fund since the GO Bonds, Series 2012 are paid from Taxes and the CO’s Series 2013 are paid from the Utility System.
 

To refinance existing city debt to gain annual interest savings.

The lower the annual debt payments are, the lower the required tax rate or the higher bonding capacity available for new projects and maintenance. 

Staff recommends authorizing City Staff and Consultants to accept the low bid as presented and lock in interest rates that generate the savings as described by SAMCO Capital in their presentation to be made at the October 12, 2021 regular meeting of the City Council.

The City can expect to save roughly $47,000 per year (net of all costs) for 11 years at today’s interest rates. Total Savings are estimated in excess of $475,000.

Staff recommends approval of Ordinance 21-B-45 on first and final reading with the following motion:

I MOVE TO ADOPT AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2021"