STRATEGIC PRIORITY: Government Performance and Financial Management
AGENDA DATE: August 12, 2020
COUNCIL DISTRICT(S): N/A
DEPARTMENT: City Controller’s Office
EXECUTIVE: Elizabeth Reich
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SUBJECT
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A resolution authorizing the preparation of plans and the payment of potential future costs and expenses for the issuances of (1) General Obligation Refunding and Improvement Bonds, Series 2020A in an amount not to exceed $232,000,000; (2) General Obligation Refunding Bonds, Taxable Series 2020B in an amount not to exceed $80,000,000; and (3) Equipment Acquisition Contractual Obligation Notes, Series 2020B in an amount not to exceed $28,000,000 - Financing: This action has no cost consideration to the City (see Fiscal Information for potential future costs)
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BACKGROUND
Pursuant to elections held in November 2017, the residents of Dallas voted and authorized the City to issue general obligation bonds for the purpose of providing funds for permanent public improvements. The adopted FY 2019-20 capital budget assumed the issuance of approximately $232.4 million in General Obligation bonds and $30.0 million in equipment acquisition notes in FY 2019-20. In June 2020, the City issued $29.7 million in Equipment Acquisition Contractual Obligations, Series 2020 to finance the purchase of City equipment and $16 million in Combination Tax and Revenue Certificates of Obligation, Series 2020 to finance the restoration of damages to City facilities following severe storms.
As continued funding for the 2017 Bond Program, the City’s Financial Advisors, PFM Financial Advisors LLC, recommend: (1) issuance of refunding and improvement bonds to refund outstanding commercial paper and finance capital improvement projects at the City, in an amount not to exceed $232,000,000; (2) issuance of refunding taxable bonds to refund outstanding refundable bonds in an amount not to exceed $80,000,000; and (3) the issuance of equipment acquisition contractual obligation notes (equipment notes) to finance the purchase of City equipment, in an amount not to exceed $28,000,000.
The City's financial advisors recommend collectively issuing up to $340,000,000 in bonds and equipment notes for the purpose of funding capital improvements, refunding outstanding bonds and commercial paper, and for the purchase of necessary equipment to maintain City services. The issuance and sale of the bonds and equipment notes is contingent upon City Council’s approval to begin preparations of the issuances and parameters Ordinances currently scheduled for consideration and approval by the City Council in September 2020.
ESTIMATED SCHEDULE OF PROJECT
Authorize Preparation for Issuance of Bonds August 2020
Approval of Parameters Ordinances September 2020
Pricing September 2020
Delivery of Proceeds October 2020
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
City Council will be briefed by memorandum regarding this matter on August 7, 2020.
FISCAL INFORMATION
This action has no cost consideration to the City. The anticipated cost of issuance is $727,648 from 2020A General Obligation Bond Funds, $291,985 from 2020B Taxable General Obligation Bond Funds, and $126,667 from 2020B Equipment Acquisition Notes Funds; for a total amount of $1,146,300. See Attachment I.
Attachment I provides an estimate of bond issuance costs for the proposed bonds, equipment notes, and the M/WBE participation. Payment of fees and expenses is contingent upon the issuance and sale of the General Obligation Refunding and Improvement Bonds, Series 2020A; General Obligation Refunding Bonds, Series 2020B; and Equipment Notes, Series 2020B.