Agenda

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City Council Regular Meeting

Meeting Date:

08/02/2022

BACKGROUND

The Schertz/Seguin Local Government Corporation (the “SSLGC” or the “Corporation”) was created on December 23, 1998 on behalf of the City of Schertz and Seguin to assist in acquiring water outside of the Edwards Aquifer. The Corporation was created by the Cities to operate a wholesale water system for the benefit of the two City’s Utility Systems. The Corporation has financed the construction of well fields and cross-country pipelines and today provides a reliable, drought-resistant water source. The Bonds are supported by Contracts between the Cities and the Corporation, and the liability is evenly split between the two Cities. Currently, the Corporation has $128,925,000 of Bonds outstanding that are supported by the two Cities. The proposed bonds are intended to pay for preliminary design and engineering related to a future project to construct parallel pipelines to serve the Gonzales and Guadalupe Treatment Plants. The Cowey Pipeline will be 42” in diameter and the Elm Creek Pipeline will be 36” in diameter.

GOAL

To have the City of Schertz City Council proceed with considering a Parameter Sale Resolution at a later City Council Meeting.

COMMUNITY BENEFIT

The City of Schertz is a member of the Schertz/Seguin Local Government Corporation. It is through the SSLGC that the City provides water to its citizens and businesses. Moving forward with the consideration of SSLGC selling bonds will help ensure that the citizens and businesses of Schertz continue to receive this vital service by providing the infrastructure that is necessary to provide water and meet the demands of Schertz.

SUMMARY OF RECOMMENDED ACTION

This action provides SSLGC the ability to move forward with preparing a parameter sale resolution to present to Schertz City Council at the August 16th meeting.

FISCAL IMPACT

The annual debt service related to the financing has not been incorporated into the future rate structure and staff will propose an additional 1% increase on water fees, estimated at $0.50 for the average water bill. SAMCO Capital Markets, the City’s and the Corporation’s Financial Advisor, proposes to sell the bonds on August 18, 2022. To complete the transaction, the SSLGC Board will need to approve proceeding and then each City will need to ratify the SSLGC Board action. The SSLGC Board authorized the parameter sale on July 21, 2022. The City of Seguin is planning to authorize the parameter sale resolution on August 2, 2022. The City of Schertz will consider and act on a parameter sale resolution authorizing the Corporation to sell bonds at the August 16^th City Council meeting. Only after both Cities approve the Resolutions can SSLGC proceed to a bond sale.

RECOMMENDATION

City Staff and consultants recommend that the City Council proceed with the consideration of a Parameter Sale Resolution at the August 16, 2022 City Council meeting.

Attachments
Bond Timeline