Agenda No. 10.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | January 11, 2022 |
| Department: | Finance |
| Subject: | Ordinance No. 22-B-02 - Consideration and approval of an ordinance by the City Council of the City of Schertz, Texas authorizing the issuance of “City of Schertz, Texas, Combination Tax and Limited Pledge Revenue Certificates of Obligation, Series 2022”; providing for the payment of said certificates by the levy of an ad valorem tax upon all taxable property within the city and further securing said certificates by a lien on and pledge of the pledged revenues of the system; and other matters incident and related thereto. (First & Final) (M. Browne/J. Walters/M. McLiney) |
BACKGROUND
The City previously authorized a Notice of Intention Resolution on November 9, 2021, declaring its intent to issue Certificates of Obligation (“CO”) to fund capital improvement projects. Having met the legal requirements of publication and having received no qualifying petition from any citizen, the City can now proceed with the consideration and issuance of the COs.
In keeping with the previously authorized Notice of Intention Resolution, the Ordinance makes clear that the City is issuing 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.
On January 11th 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. The authorization and sale of these COs will not require a tax rate increase or a utility rate increase.
In keeping with the previously authorized Notice of Intention Resolution, the Ordinance makes clear that the City is issuing 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.
On January 11th 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. The authorization and sale of these COs will not require a tax rate increase or a utility rate increase.
GOAL
To complete the sale of bonds to fund necessary and cost saving infrastructure.
COMMUNITY BENEFIT
Improved traffic flow at the intersection of FM 78 and 3009 and on FM 1518 south of FM 78.
SUMMARY OF RECOMMENDED ACTION
Staff recommends approving the sale of Certificates of Obligation with funds delivered on February 2, 2022.
FISCAL IMPACT
The funds are proposed to be distributed to projects as follows:
FM 1518 Utility Relocation $5,000,000
Energy Saving Project $1,250,000
Streets/FM 78/3009 $3,900,000
The FM 1518 Utility Relocation funds were included in the rate study and should not cause any additional rate increases.
The Energy Savings Project will come with a savings guarantee contract with the service provided that will be selected. The savings will cover the cost of the debt payments and not cause a tax or fee increase.
The Streets projects debt was expected to be in FY 2024-25. Due to the time sensitive nature of proceeding to develop the FM78/3009 intersection that timeline was moved up. This is not expected to have a negative impact on future tax rates but could lower or delay the next planned debt issuance for streets.
FM 1518 Utility Relocation $5,000,000
Energy Saving Project $1,250,000
Streets/FM 78/3009 $3,900,000
The FM 1518 Utility Relocation funds were included in the rate study and should not cause any additional rate increases.
The Energy Savings Project will come with a savings guarantee contract with the service provided that will be selected. The savings will cover the cost of the debt payments and not cause a tax or fee increase.
The Streets projects debt was expected to be in FY 2024-25. Due to the time sensitive nature of proceeding to develop the FM78/3009 intersection that timeline was moved up. This is not expected to have a negative impact on future tax rates but could lower or delay the next planned debt issuance for streets.
RECOMMENDATION
Staff recommends approval of Ordinance 22-B-02
I MOVE THAT THE CITY COUNCIL ADOPT AN ORDINANCE AUTHORIZING THE “CITY OF SCHERTZ, TEXAS, COMBINATION TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATION, SERIES 2022”
I MOVE THAT THE CITY COUNCIL ADOPT AN ORDINANCE AUTHORIZING THE “CITY OF SCHERTZ, TEXAS, COMBINATION TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATION, SERIES 2022”