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CITY COMMISSION AGENDA ITEM |
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Department: |
Finance |
Commission Meeting Date: September 18, 2018 |
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Staff Contact: |
Danielle Buschkoetter, Interim Finance Director |
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Recommendations/Options/Action Requested: |
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Adopting Resolution No. 7266, authorizing the offering for sale of water and sewage system improvement revenue bonds, Series 2018, of the City of Lawrence, Kansas |
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Executive Summary: |
Staff proposes revenue bond financing for water and wastewater projects listed in the capital improvement master plans included in the adopted 2019-2023 CIP and 2019 operational budgets.
Staff estimates the following 2019 water and wastewater projects will cost $21,200,000.
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. Field operations facilities 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 order to finance these costs, the City proposes to issue utility system revenue bonds with a maximum principal amount of $23,000,000.
The bonds are proposed to be sold using the City’s normal competitive sale approach, with sealed bids submitted by prospective purchasers of the bonds, and the award of the bonds to the bidder who submits the lowest interest rate. Bond sales have traditionally been scheduled on Commission meeting dates, with the Commission approving the sale of the bonds to the best bidder at its meeting the evening of the sale date.
This issuance is proposed to be structured using a parameters approach where the Mayor or Vice Mayor are authorized to formally award the bonds to the best bidder. The parameters approach has been suggested by the City’s municipal advisor due to the upcoming election and the potential market volatility that may result. If the traditional approach was used, the timing would be such that the bond sale would land on November 6, 2018 (election day).
The parameters approach allows for a
competitive sale of the Revenue Bonds to occur in October, on a date other
than a Commission meeting date. The Mayor and Vice Mayor are only authorized
to award the bonds if the best bid is within certain parameters set forth in
the resolution. The parameters include maximum principal amount ($23,000,000),
maximum interest rate (4.50%), final maturity of the bonds (November
If those parameters are met, the Mayor is authorized to award the Bonds to the best bidder on the date of sale. The City Commission will then be asked to approve the final bond ordinance and resolution, confirming all of the final terms of the bonds, at the next regularly scheduled meeting.
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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): |
Repayment of bonds are included in the 2019-2023 Capital Improvement Program and 2019 Budget. The repayments are included within the balanced rate model. |
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Attachments: |
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Reviewed By: (for CMO use only) |
☐TM ☐DS ☒CT ☐BM |