Title
An ordinance of the City of Mesquite, Texas, providing for the issuance of City of Mesquite, Texas, General Obligation Refunding Bonds, 2025, in the aggregate principal amount not to exceed $42,800,000; awarding the sale thereof; levying a tax in payment thereof; authorizing the execution and delivery of a paying agent/registrar agreement and deposit agreement; approving the official statement; and enacting provisions incident and relating to the subject and purposes of this ordinance.
Body
The City regularly monitors current outstanding bonds for potential refunding opportunities that can generate savings in total debt service costs, which saves money transferred from the General Fund for annual principal and interest payments for outstanding general obligations.
The attached parameter ordinance authorizes Council to delegate the approval of the sale of General Obligation Refunding Bonds, Series 2025 to the Director of Finance or his designee, as authorized by Chapter 1207, Texas Government Code, subject to all conditions as specified in the refunding ordinance.
The pricing conditions and parameters include: a true interest costs of the bonds not to exceed 4.25 percent; a total aggregate refunding bond principal amount with net premium not to exceed $42,800,000 and produce a net present value debt service savings of at least 2% of the principal amount of the refunded bonds; a maximum maturity limit of no later than August 15, 2036 for any bond; and a credit rating among the four highest rating categories for long-term obligations as assigned by a nationally recognized rating agency.
The refunded bonds candidates include:
• Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2012
• Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2013
• Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2014
• General Obligation Refunding Bonds, Series 2014
• Combination Tax and Limited Surplus Revenue Certificates of Obligation, Series 2015
This parameter ordinance would allow City staff up to 180 days after adoption to work with the City’s Financial Advisor, Hilltop Securities, to sell the bonds, subject to the above parameters, at the best possible rate when interest rates are moving, rather than locking in the price on the day of the Council meeting.
Recommended/Desired Action
Staff recommends approval of the ordinance.
Attachment(s)
Ordinance
Drafter
Ted Chinn
Head of Department
Ted Chinn