15 - NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION

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Item No. 15 memorandum TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION DATE: July 30, 2015 BACKGROUND: The possibility of issuing $2,500,000 worth of tax and revenue certificates of obligation was discussed at the July 13, 2015 and July 27, 2015 Council meetings. The purpose of the certificates has been proposed to be $2,000,000 for drainage projects and $500,000 for park improvements. Due to decreased debt payments on the City's GO Refunding Bonds Series 2012, this new debt issue would not cause the property tax rate to increase. STATUS OF ISSUE: This issue is on the agenda for discussion and possible action. If the Council wishes to go forward and issue this debt, the first step would be to pass a resolution directing the publication of a notice of intention to issue these certificates of obligation twice in the local newspaper. The staff and financial advisors would then prepare the official financing statement and acquire a bond rating from Moody's. Bids would then be taken from potential buyers to purchase the certificates. Finally, the Council would adopt an ordinance on September 14, 2015 that authorizes and sells the certificates. BUDGET: The certificates would be repaid by levying a property tax sufficient to make the $186,500 average annual debt payment. RECOMMENDATION: Motion to approve the resolution directing publication of notice of intention to issue combination tax and revenue certificates of obligation.