Agenda

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City Council Regular Meeting

Meeting Date:

08/09/2022

BACKGROUND

The Schertz/Seguin Local Government Corporation was created on December 23, 1998 on behalf of the City of Schertz and Seguin to assist in acquiring water outside the Edwards Aquifer. The Corporation was created by the Cities to operate a wholesale water system for the benefit of the two Cities' 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 financing is 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

The goal is to approve a resolution to approve a bond resolution previously adopted by the Board of Directors of the Schertz/Seguin Local Government Corporation (SSLGC) authorizing the issuance of obligations designated as “Schertz/Seguin Local Government Corporation contract revenue improvement bonds, new series 2022A."

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

Recommend that the City Council adopt Resolution No. 22-R-76

Specific Motion

I MOVE THAT THE CITY COUNCIL APPROVE A RESOLUTION APPROVING A BOND RESOLUTION PREVIOUSLY ADOPTED BY THE BOARD OF DIRECTORS OF THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION AUTHORIZING THE ISSUANCE OF BONDS DESIGNATED AS “SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION CONTRACT REVENUE IMPROVEMENT BONDS, NEW SERIES 2022A”

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 must approve proceeding and then each City must ratify the SSLGC Board action. The SSLGC Board authorized the parameter sale on July 21, 2022. The City of Seguin authorized the parameter sale resolution on August 2, 2022. This Resolution by City of Schertz authorizes the Corporation to sell bonds. Only after both Cities approve the Resolutions can SSLGC proceed to a bond sale.

RECOMMENDATION

City Staff and consultants recommend that the City Council adopt Resolution No. 22-R-76 approving the sale of the Bonds so long as certain savings targets can be met as outlined in the Resolution before the Council and ratifying the Corporation’s action authorizing the sale of Bonds on July 21, 2022.

Specific Motion

I MOVE THAT THE CITY COUNCIL APPROVE A RESOLUTION APPROVING A BOND RESOLUTION PREVIOUSLY ADOPTED BY THE BOARD OF DIRECTORS OF THE SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION AUTHORIZING THE ISSUANCE OF BONDS DESIGNATED AS “SCHERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION CONTRACT REVENUE IMPROVEMENT BONDS, NEW SERIES 2022A”

Attachments
Resolution 22-R-76