10 - Issuance of Certificates of Obligation Series 2020

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Item No. 10 TO: City Council FROM: Gene Anderson, Interim City Manager and Finance Director SUBJECT: ISSUANCE & SALE OF CITY OF PARIS COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2020 DATE: January 7, 2020 BACKGROUND: The citizens of Paris voted to increase the hotel occupancy tax from 7% to 9%. The City will issue certificates of obligation to fund various capital improvements at Love Civic Center. The increased revenues from the hotel occupancy tax will be used to make the debt payments on the certificates of obligation which are to be sold in January 2020. Because of the small size of the 2020 certificates of obligation issue ($1.5 million), the City is seeking private placement of the certificates 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 certificates will have a 10 year payoff schedule. STATUS OF ISSUE: Bids were received January 10, 2020 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 certificates and approving all other matters incident to the certificate issuance. BUDGET: Cost of the certificate issuance will be paid from the certificate proceeds with the Lamar County Chamber of Commerce reimbursing that cost to the City. This reimbursement will be deposited into the construction fund established for the Civic Center upgrade. 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 2020 and approving all matters incident thereto.