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AI# 10796
Regular City Council Meeting
4.2.
06/28/2022:
Information
Agenda Item
Resolution - Finance:
Consider a resolution authorizing the refunding of Canadian River Municipal Water Authority Subordinate Lien Contract Revenue Refunding Bonds, Series 2014 (Conjunctive Use Groundwater Supply Project).
Item Summary
At the quarterly meeting on April 13, 2022, the Board of Directors of the Canadian River Municipal Water Authority ("CRMWA") considered the refunding of the Series 2014 bonds previously issued for the Conjunctive Use Groundwater Supply Project (the "Project") in order to provide debt service savings for CRMWA and member cities. The Project contract between CRMWA and member cities requires that prior to refunding any outstanding bonds, CRMWA must obtain each member city's consent and waiver as to certain notice requirements in the contract. The attached resolution sets out the City of Lubbock's consent and waiver with regard to the bond refunding.
The revenues paid by the City of Lubbock under the Project contract between the City and CRMWA secure the debt service on certain obligations of CRMWA, including the outstanding CRMWA Subordinate Lien Contract Revenue Refunding Bonds, Series 2014 (the "Series 2014 Bonds"). At CRMWA's April 13, 2022 regular meeting, George Williford with Hilltop Securities Inc., CRMWA's financial advisor, identified potentially significant savings if some or all of these outstanding Series 2014 Bonds are refunded, as a tax-exempt refunding issue, in accordance with the February 15, 2023 optional call date on the bonds. Based on that presentation, the Board of Directors authorized CRMWA Staff, the financial advisor, and bond counsel to reach out to member cities to obtain the requisite consents, monitor market conditions, and if favorable market conditions persist, to present the item on the July 13, 2022 regular quarterly meeting agenda for Board action.
To appropriately time the refunding of the Series 2014 Bonds, CRMWA will delegate the ability to trigger the refunding of the obligations to the General Manager, if he is able to achieve a certain level of savings through the refunding of the Series 2014 Bonds. The resolution which is presented to the City of Lubbock for consideration, tracks those specified conditions. Accordingly, the City's resolution is effective only if CRMWA can achieve, at a minimum, the present value savings of at least 3.00% of the refunded principal amount.
Fiscal Impact
Savings to the City of Lubbock Water/Wastewater debt service will depend on the refunding results.
Staff/Board Recommending
D. Blu Kostelich, Chief Financial Officer
Attachments
Resolution - CRMWA 2022 Refunding
Certificate - City Secretary
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