Print Staff Memo

TO:

Honorable Mayor and Members of the Common Council

FROM:

Julie Calmes, Finance Director

DATE:

November 12, 2024

SUBJECT:

Res 24-588 Approve Resolution authorizing the issuance of not to exceed $5,775,000 aggregate principal amount of Water System Revenue Bonds of the City of Oshkosh, Winnebago County, Wisconsin, for the purpose of completing certain capital projects related to the City's waterworks system, prescribing details of said bonds and the form of bond, providing for the payment of said bonds and the covenants with respect thereto, authorizing the award of said bonds to the best bidder therefor and related matters.

BACKGROUND

In order to borrow money through the bonding process, the City Council is requested to consider this resolution. This resolution authorizes staff to proceed with the preparation and documentation needed to sell the bonds and receive the proceeds. The sale of the bonds and notes will occur at least 30 days after the initial resolution is authorized.

As is normal practice, the bonds and notes as outlined above will be offered to the public through competitive sales estimated to occur on December 4, 2024. If all the parameters in the Pre-Sale Report are met, the City Manager and Finance Director are authorized to complete the sales and the terms will be finalized.

We are separating the Utility borrowing from the General Obligation borrowing to match the obligations with the funds that benefit from the borrowing. This also helps manage the City's debt burden in recognition of the regulatory limit of 5% of Equalized Value for General Obligation Debt, and to reserve general obligation borrowing capacity for future needs.

ANALYSIS

While market conditions and specific bidders dictate what the interest rates are, the interest rate in the parameter cannot exceed 4.50% for the General Obligation Promissory Notes (2024A). The interest rate in the parameter cannot exceed 4.75% for both the Water System Revenue Bonds (2024B) and the Sewer System Revenue Bonds (2024C).

FISCAL IMPACT

The $17,415,000 of General Obligation Promissory Notes will be paid off over twenty years. The Water System Revenue Bonds of $5,775,000 and the Sewer System Revenue Bonds of $4,330,000 will be paid off over twenty years. All issues will be added to the City's outstanding debt obligations.

RECOMMENDATION

Staff recommends adoption of the resolutions noted above.

Attachments

Res 24-588

Pre-Sale Report 2024B