07 - Issuance & Sale of City of Paris GO Bonds, Series 2018

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Item No. 7 11 V101 TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: ISSUANCE & SALE OF CITY OF PARIS Go BONDS, SERIES 2018 DATE: March 23, 2018 BACKGWUND. On May 11, 2013 Paris residents voted to issue $45,000,000 in General Obligation Bonds to re -build water and sewer lines. Only $35,000,000 of those bonds was issued in 2013. In December 2016, the City issued another $8,800,000 of the bonds approved in 2013. On May 6, 2017 Paris citizens voted to issue $10,,000,000 in General Obligation Bonds with $9.5 million dedicated to rebuild local streets and $500 thousand dedicated to park improvements. In July 2017 the city issued 9,750,000 of the bonds authorized in May 2017. Because the City wanted to make both the 2016 and 2017 issues "batik qualified" issues, the City took steps not to issue more than $10,000,00�0 of long terra debt in those years. Long term debt includes things like copier ]cases and bank financed fire trucks. Bank qualified bond issues have certain income tax advantages and bring better bids than non-bank qualified bond issues. The City staff working with Sanico Capital Markets, Inc. (the City's financial advisors) and McCall, Parkhurst & Horton I..L.P. (the City's bond attorneys) are proposing to sell the small unissued portions of' the 2013/2016 and 2017 bond issues which were authorized by citizen vote. This 2018 bond issue will be mostly water and sewer related ($1.2 million), but a small portion will be for streets ($190,000). Because of the small size of the 2018 bond Issue (approximately $1.39 million), the City is seeking private placement of the bonds through a bid process as a cost savings, measure. Using this method, the City will not have to pay for a bond rating or issue an official statement on the bonds. The bonds will have a 1.0 year payoffseliedule. STATUS OF ISSUE: Bids willbe received April 5, 2018 at the Dallas offices of Samco Capital Markets,, Inc, A summary of those bids will be provided at the council meeting. An ordinance has been prepared authorizing the issuance of these bonds and approving all other matters incident to the bond issuance. BUDGET- Cost of the bond issuance will be paid from the bond proceeds. RECOMMENDATION: 1"he staff recommends the following motion: I move to adopt at) ordinance authorizing the issuance and sale of City of` Maris, Texas' General Obligation Bonds, Series 2018 for water and sewer system improvements and street and road improvement purposes, and approving all other matters pertaining thereto,