PRESENTER: Presenter
Sandy Paulos, Director of Finance
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SUBJECT: Title
Discuss and consider the first and final reading of an ordinance authorizing the issuance of the city of New Braunfels, Texas combination tax and revenue certificates of obligation, series 2023; levying an ad valorem tax and pledging certain surplus revenues in support of the certificates; approving an official statement, a bond purchase agreement, a paying agent/registrar agreement and other agreements relating to the sale and issuance of the certificates; establishing procedures for selling and delivery of one or more series of the certificates; and ordaining other matters relating to the issuance of the certificates.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
As part of the 2019 Bond Program investment, the New Braunfels Economic Development Corporation (NBEDC) approved up to $15 million to support the first phase of the development of the Sports Complex. The first contribution of $5 million was made through leveraging surplus reserves from the New Braunfels Economic Development Corporation. The NBEDC now intends to issue the remaining $10 million in a Certificate of Obligation on behalf of the City’s credit rating, which allows the NBEDC to take advantage of better interest rates. Council approved the resolution authorizing proceeding with the issuance and the publication of the Notice of Intention for this issuance at the 7/10/23 meeting. The debt service will be entirely supported by the NBEDC (sales tax). A parameter sale is recommended for this refunding opportunity 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: $10,000,000
2. Maximum Interest Rate: As defined by statute
3. Maximum Maturity: February 1, 2043
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 for the Certificates of Obligation will be used to support the Sports Complex.
The annual debt service related to the Certificates of Obligation will be supported entirely by the NBEDC.
Recommendation
RECOMMENDATION:
Staff recommends approval of the ordinance.