Agenda

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City Council Regular Meeting

Meeting Date:

08/02/2022

BACKGROUND

The voters authorized the City to issue $15,450,000 for public safety facilities (Proposition A) at an election held November 2, 2021 and $4,395,000 for streets and bridge (Proposition 1) at an election held November 3, 2015. The Council is requested to authorize City staff and consultants to proceed with the sale of approximately $19,845,000 General Obligation Bonds, Series 2022. The Proceeds will be used for construction of fire station No. 4 and street improvements, respectively. The Bonds will be amortized over 20 years and will be callable by the City in 10 years as is customary for a financing of this size.

Due to volatile market conditions in the municipal bond market, the City is utilizing a negotiated sale method rather than a competitive sale method as has been the City’s practice over the past several debt issuances. The reason for doing so arises from concerns that competitive sales are not getting as many bids and the purchaser’s spreads are much wider than historical norms resulting in higher interest rate financings. The City designated Baird to serve as the senior manager of the financing with Raymond James and Frost Bank serving as co-managers.

GOAL

To issue bonds approved by the voters of the City of Schertz to improve roadways on FM 1518 and to construct Fire Station #4.

COMMUNITY BENEFIT

The community will benefit from improved traffic flow on FM 1518 and the addition of the new Fire Station will provide better coverage and response time as well as reduce fire insurance costs for the commercial sector.

SUMMARY OF RECOMMENDED ACTION

Staff recommends approval of the bond ordinance.

FISCAL IMPACT

The issuance of the Bonds should not result in a tax rate increase. The proceeds will be delivered to the City on August 24th. The Bonds are being issued at the same time as the Certificates of Obligation, to be discussed in greater detail under separate agenda items to follow. When the CO’s are approved, along with the GO Bond, it is estimated that there will be no impact on the I&S Tax Rate.

RECOMMENDATION

Approval of Ordinance No. 22-B-32 authorizing the sale of Bonds.

Motion: I MOVE THAT THE CITY COUNCIL ADOPT AN ORDINANCE AUTHORIZING THE “CITY OF SCHERTZ, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2022”

Attachments
Ord 22-B-32
Paying Agent Agreement
Purchase Contract