Agenda No. 4.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | November 9, 2021 |
| Department: | Finance |
| Subject: | Resolution 21-R-123 - Consideration and approval of a Resolution by the City Council of the City of Schertz, Texas authorizing and approving publication of Notice of Intention to issue Certificates of Obligation; complying with the requirements contained in Securities and Exchange Commission Rule 15c2-12; and providing an effective date. (M. Browne/J. Walters) |
BACKGROUND
For a City to issue Certificates of Obligation (“CO”) to fund capital improvement projects, the City must first adopt a Notice of Intention Resolution and then post the Notice of Intention in the City’s paper of record for two consecutive weeks and post the Notice on the City’s website. By law, the City can sell its COs at least 46 days after the first publication so long as a petition, certified by the City Secretary, containing signatures of at least 5% of the qualified voters, is not submitted to the City prior to the sale.
This Resolution alerts the Citizens that the proposed projects will be considered, and a Certificate of Obligation (“CO”) may be approved on January 11, 2022.
The Resolution makes clear that the City intends to issue COs in an amount not-to-exceed $10,150,000 for the purposes of purchasing and installing energy management and conservation equipment, street improvements and constructing improvements to the City’s Utility System.
$1.25 million is planned to fund energy efficiency projects in city facilities. These upgrades will include LED lights and HVAC unit replacements and fixes. Savings related to this project are guaranteed by the contractor to meet or exceed the future debt payments and will cause no impact to the city's rates or fees.
$3.9 million will be available for roadway improvements and land acquisition. Staff plans to use those funds to start reviewing improvements to the FM 3009 and FM 78 intersection and any remaining funds could be used to fund additional roadway and traffic improvements.
$5 million will go toward relocating the city's utility lines along FM 1518 in preparation of the road being widened. Utlities must be moved before roadwork can begin. Staff believes the roadwork contracts could be awarded toward the end of 2022.
On January 11, 2022 the City will price its COs and the Council will then consider an Ordinance approving the sale to the winning bidder of the COs at a competitive sale. The COs will be supported by both ad valorem taxes for general fund projects and the utility fund for projects related to utility system improvements. It is anticipated that the authorization of the Notice of Intention Resolution and subsequent sale of COs will not require a tax rate increase or a utility rate increase.
This Resolution alerts the Citizens that the proposed projects will be considered, and a Certificate of Obligation (“CO”) may be approved on January 11, 2022.
The Resolution makes clear that the City intends to issue COs in an amount not-to-exceed $10,150,000 for the purposes of purchasing and installing energy management and conservation equipment, street improvements and constructing improvements to the City’s Utility System.
$1.25 million is planned to fund energy efficiency projects in city facilities. These upgrades will include LED lights and HVAC unit replacements and fixes. Savings related to this project are guaranteed by the contractor to meet or exceed the future debt payments and will cause no impact to the city's rates or fees.
$3.9 million will be available for roadway improvements and land acquisition. Staff plans to use those funds to start reviewing improvements to the FM 3009 and FM 78 intersection and any remaining funds could be used to fund additional roadway and traffic improvements.
$5 million will go toward relocating the city's utility lines along FM 1518 in preparation of the road being widened. Utlities must be moved before roadwork can begin. Staff believes the roadwork contracts could be awarded toward the end of 2022.
On January 11, 2022 the City will price its COs and the Council will then consider an Ordinance approving the sale to the winning bidder of the COs at a competitive sale. The COs will be supported by both ad valorem taxes for general fund projects and the utility fund for projects related to utility system improvements. It is anticipated that the authorization of the Notice of Intention Resolution and subsequent sale of COs will not require a tax rate increase or a utility rate increase.
GOAL
To approve the notice of intent resolution and begin the process of issuing bonds for energy efficiency projects, FM 1518 utility relocation, and roadway improvements for FM 3009 and FM 78 intersection.
COMMUNITY BENEFIT
The infrastructure improvements provided by these bonds will enhance traffic flows in congested areas and reduce the City's energy operating costs.
SUMMARY OF RECOMMENDED ACTION
Staff recommends approval of Resolution 21-R-123
FISCAL IMPACT
The energy efficiency project estimated at $1.25 million will pay for itself and will be guaranteed by the contractor. This will then have no impact on tax rates or utility rates.
The $3.9 million for FM 3009 and FM 78 will fit into the long term debt forecast and not result in an increase in the tax rate.
The $5 million for FM 1518 utility relocation is included in the planned utility rate increases in the rate model and will not result in additional rate increases.
The $3.9 million for FM 3009 and FM 78 will fit into the long term debt forecast and not result in an increase in the tax rate.
The $5 million for FM 1518 utility relocation is included in the planned utility rate increases in the rate model and will not result in additional rate increases.
RECOMMENDATION
Staff recommends approval of Resolution 21-R-123