PRESENTER: Presenter
Sandy Paulos, Director of Finance
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SUBJECT: Title
Discuss and consider the approval of an ordinance authorizing the issuance of city of New Braunfels, Texas Tax Notes, Series 2023; authorizing the levy of an ad valorem tax in support of the notes; approving a paying agent/registrar agreement, an official statement and other agreements related to the sale and issuance of the notes; establishing the procedures for selling and delivering the notes; authorizing the reimbursement of certain project costs prior to issuance of the notes and authorizing other matters related to the issuance of the notes.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
At the July 6th City Council retreat, direction was provided to move forward with a tax note to support light fleet vehicle replacements. This Tax Note will be the first issuance of the proposed rolling tax note program for the replacement of light fleet and equipment on an ongoing basis. The rolling Tax Note program will replace funding these items through the Equipment Replacement Fund and will eliminate the recurring annual transfer from the General Fund to the Equipment Replacement Fund for these assets. The debt service associated with the tax note has been incorporated within the proposed I&S portion of tax rate for FY 2024 (20.89 cents). A parameter sale is recommended due to the interest rate environment.
Parameter Sale
A parameter sale sets minimum parameters of the issuance/sale and designates the City Manager and Director of Finance as the pricing officers. The attached ordinance establishes the proposed parameters for the Series 2023 issuance as follows:
1. Maximum Par to be issued: $2,000,000
2. Maximum Interest Rate: As defined by statute
3. Maximum Maturity: February 1, 2030
If any of the parameters are not met, the designated officials would not have the ability to complete the pricing/refunding.
A parameter sale is recommended for this refunding opportunity due to the interest rate environment. Given the rate risk, the parameter sale gives the organization the ability to price as soon as Wednesday, September 6.
ISSUE:
N/A
FISCAL IMPACT:
The proceeds of the tax note will support the replacement of light fleet and equipment for the City. The annual debt service payment will be structured to align with the I&S rate for FY 2024, which is proposed to remain at 20.89 cents.
Recommendation
RECOMMENDATION:
Staff recommends approval of the ordinance.