CITY COMMISSION AGENDA ITEM

Department:

Finance Department

Commission Meeting Date:  Nov. 6, 2018

Staff Contact:

Danielle Buschkoetter, Interim Finance Director

Recommendations/Options/Action Requested:

Declare an emergency and adopt on first and second readings Ordinance No. 9574, providing for the issuance of Water and Sewage System Improvement Revenue Bonds, Series 2018 of the City of Lawrence, Kansas to J.P. Morgan Securities, LLC. 

Consider adopting Resolution No. 7270 prescribing the forms and details of and authorizing and directing the sale and delivery of Water and Sewage System Improvement Bonds, Series 2018, of the City of Lawrence, Kansas.

Executive Summary:

On September 18, 2018 the City Commission authorized the issuance of water and sewage system revenue bonds for several improvements to the water and sewage system. These improvements were identified in the 2019-2023 Capital Improvement Plan that was adopted August 14, 2018. The Commission also authorized the Mayor to award the sale of the bonds to the best bidder for the bonds, so long as the bids were within certain parameters.

On October 23, 2018, the City held a competitive public sale of the bonds and opened bids from prospective bidders.  The City received seven (7) bids, with the best bid submitted by J.P. Morgan Securities, LLC with a true interest rate of 3.5006%.  The bid met the parameters set out in Resolution 7266, and the Mayor awarded the sale of the bonds to J.P. Morgan Securities, LLC.

Approval of Ordinance No. 9574 and Resolution No. 7270 are the final actions necessary to set all of the final terms and conditions of the bonds, and provide for the sale of the bonds to J.P. Morgan Securities, LLC.

The bonds will fund the following 2019 water and wastewater projects at a total cost of $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 addition to funding the project costs, the bonds will also fund financing costs for a total bond issue size of $21,328,576 calculated as follows:

Project Costs	$21,200,000
Plus: Issue Cost	128,576
New Project Issue Size	$21,328,576

Strategic Plan Critical Success Factor

Effective Governance and Professional Administration

Sound Fiscal Stewardship

Commitment to Core Services

Fiscal Impact (Amount/Source):

All projects to be financed were included in the 2019-2023 Capital Improvement Program.  The debt service for the cost of improvements are included in the debt service fund beginning with the 2019 operating budget.

Attachments:

Ordinance No. 9574

Resolution No. 7270

Executed Bid from J.P. Morgan Securities, LLC

Reviewed By: (for CMO use only)

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