Title
Consider and take action to approve a resolution authorizing publication of Notice of Intention to issue Certificates of Obligation (Assistant City Manager, Management Services)
Staff recommends approval.
Background:
Prior to issuing Certificates of Obligation, City Council is asked to approve publication of a Notice of Intent to issue the Certificates of Obligation. This a legal requirement to communicate to the citizens that the City is in the process of issuing a Certificate of Obligation debt instrument.
The City is authorizing an issuance of certificates of obligation in an amount not to exceed $21,550,000, including issuance costs. The proceeds of the bond sale will be used to fund $12,532,000 for City projects, $8,880,000 for League City Section 4B Industrial Development Corporation's (4B) project (Eastern Regional Park) and $138,000 for issuance costs. The combined sale will result in a savings of issuance costs and is expected to result in potentially lower interest rates in the market.
The City's portion of the bond issue is comprised of $12,532,000 of General Fund projects. A detailed list of projects to be funded is attached. All projects are part of the CIP which was recently approved by Council. The Certificates of Obligation for the City will be funded with property tax revenues through the Debt Service Fund for the General Fund projects.
The 4B's portion of the bond issue represents $8,880,000 to be used for the design and construction of the Eastern Regional Park and will be funded by the 4B's sales tax revenues. An interlocal agreement between the 4B and the City will authorize the reimbursement to the City for the debt service payment. If this interlocal agreement is not approved by the 4B Corporation Board and the City Council prior to the approval of the Preliminary Official Statement (POS)on January 11, 2011 by City Council, the POS will be amended to take the 4B proceeds out of the City's sale.
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