08 - Certificates of Obligation Series 2021 - Wastewater Plant

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Item No. 8 TO: Mayor & City Council Grayson Path, City Manager FROM: Gene Anderson, Finance Director SUBJECT: ORDINANCE AUTHORIZING THE ISSUANCE OF CERTIFICATES OF OBLIGATION TO FINANCE THE CONSTRUCTION OF A WASTEWATER PLANT DATE: April 12, 2021 BACKGROUND: On January 25, 2021 the City Council heard a project update from Garver Engineering. Also discussed were the necessity of issuing long term debt to construct the plant and the sewer rate increase necessary to pay for the required debt issue. On February 8, 2021 the City Council adopted a resolution that notice of intent to issue certificates of obligations to finance construction of a waste water treatment plant be posted as required by law and published in a newspaper as required by law. STATUS OF ISSUE: In order to issue certificates of obligation to construct the new wastewater plant, the Council must now conduct a public hearing and approve an ordinance authorizing the issuance and sale of certificates of obligation backed by both property taxes and sewer revenues. Only sewer revenues will be used to pay the debt, but the City will receive a better interest rate by pledging both revenue sources to pay the debt. This ordinance will also formally engage our bond council (Dan Culver of McCall Parkhurst & Horton LLP), approve the Official Statement (a document which explains the purpose and other details about the certificates of obligation and provides financial information about the City). The ordinance also approves the bank paying agent which will keep track of the ownership of the certificates and make payments to those owners at the appropriate time. BUDGET: A new construction fund and a new Interest & Sinking Fund will be established to handle the expenditure of the CO proceeds and to make the required debt payments. RECOMMENDATION: Move to adopt an ordinance authorizing the issuance and sale of the City of Paris, Texas Combination Tax and Surplus Revenue Certificates of Obligation, Series 2021 and approving all matters incident thereto.