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CITY COMMISSION AGENDA ITEM |
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Department: |
Finance |
Commission Meeting Date: December 12, 2017 |
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Staff Contact: |
Bryan Kidney, Director |
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Recommendations/Options/Action Requested: |
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Review bids received and approve sale to the lowest responsible bidder $18,630,000* Water and Sewage System Improvement and Refunding Bonds, Series 2017-A. Declare an emergency and adopt on first and second readings Ordinance No. 9429, providing for the issuance of water and sewage system improvement and refunding revenue bonds, series 2017-A of the City of Lawrence, Kansas.
Adopt Resolution No. 7231, prescribing the forms and details of and authorizing and directing the sale and delivery of water and sewage system improvement and refunding revenue bonds, series 2017-A of the City of Lawrence, Kansas. |
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Executive Summary: |
Project Funding Staff was directed to pursue revenue bond financing for water and wastewater projects included in the capital improvement master plans included in the adopted 2018-2022 CIP and 2018 operational budgets.
Staff estimates the following 2018 water and wastewater projects will cost $16,000,000.
1. General improvements to Clinton and Kaw water treatment facilities and to raw water systems 2. General improvements to water storage, pumping stations and automated metering infrastructure 3. Watermain assessment, relocation, rehabilitation, replacement and extension 4. Capital project and utility billing management 5. General improvements to Kansas River and Wakarusa River wastewater treatment facilities 6. General improvements to wastewater containment and pumping stations 7. Rapid inflow/infiltration reduction program 8. Sanitary sewer/manhole assessment, cured in place piping (CIPP), relocation, rehabilitation, replacement and extension
In addition to funding the project costs, we estimate that there will be the additional financing costs and reoffering premium for a total estimated bond issue size of $16,125,000 calculated as follows:
Refunding of 2008 Revenue Bonds In addition to the 2018 project funds, staff was directed to pursue refunding of the outstanding 2008 water and sewage revenue bond. The City of Lawrence revenue bond series 2008 has outstanding balance of $2,740,000. The original bond was issued to finance a variety of water and wastewater projects in 2008 for a total issue size of $4,270,000 with a final maturity date of 11/01/2028.
The 2008 bonds included a provision to call outstanding maturities after 2017. The average interest rate the City is paying for the outstanding maturities for years 2018 through 2028 is 4.255%. The market rates for the same years of maturities are estimated to average 2.75%. If the City issues new revenue bonds and uses the proceeds from the new sale to pay-off the 2008 bonds, the latest estimated savings (net of issue costs) is a present value of $268,374.
The estimated size of refunding:
Total Estimated Issue Size
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Strategic Plan Critical Success Factor |
Effective Governance and Professional Administration Sound Fiscal Stewardship Commitment to Core Services |
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Fiscal Impact (Amount/Source): |
All projects to be financed were included in the 2018-2022 Capital Improvement Program. The debt service for the cost of improvements are included in the debt service fund beginning with the 2018 operating budget. The refunding portion of the transaction is estimated to result in an economic benefit to the City of $268,374. |
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Attachments: |
Ordinance No. 9429 - Updated 12/12/17 |
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Reviewed By: (for CMO use only) |
☐TM ☐DS ☒CT ☐BM |