Ordinance Single Reading - Finance: Consider the adoption of an ordinance of the City of Lubbock, Texas, authorizing the issuance and sale of City of Lubbock, Texas, Tax Note, Series 2021; levying a tax in payment thereof; and enacting other provisions relating to the subject.
Item Summary
This ordinance authorizes the issuance of the Tax Note, Series 2021. The purpose of the Tax Note is to pay contractual obligations incurred or to be incurred for: (i) the purchase of property consisting of materials, supplies, equipment, and machinery; and (ii) paying the cost of issuance related to the Tax Note.
The Note will be excluded from gross income for federal income tax purposes, with annual payments of principal on February 15, 2022, through February 15, 2028, and with semi-annual interest payments beginning on February 15, 2022, and on each February 15 and August 15 thereafter, until maturity. Closing date is anticipated on August 24, 2021, subject to Texas Attorney General approval.
The Note is being offered to potential lenders for investment in its own account as a privately negotiated bank loan. Responses from potential lenders for this Note must be submitted no later than July 26, 2021. The Note will be awarded to the proposal producing the lowest interest cost to the City and with the terms most advantageous to the City (including, but not limited to, paying agent fees, underwriting fees, bank counsel fees, and early redemption provisions). The recommended lender will be presented to Council for approval at the July 27, 2021 City Council meeting.
Fiscal Impact
Annual payments will be made from the revenues of City departments and/or an ad valorem tax. The total principal amount on the issuance is $3,015,000.
Staff/Board Recommending
D. Blu Kostelich, Chief Financial Officer
Attachments
City of Lubbock Tax Note Series 2021 - Ordinance 4163-9369-2208 1
