Agenda Item Title:
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Administrative Services Department requesting that the Council authorize the issuance and sale of a conduit bond on behalf of the Waterford Scool, also providing for the publication of a notice of bonds to be issued and a notice of public hearing.
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Presenter:
Brian Kelley, Administrative Services Director
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Description/Background:
On October 26, 2021 the Council received a presentation from the City finance team asking for direction on a possible request for conduit financing for the Waterford School.
The City may, from time to time, issue bonds on behalf of other public or private entities. These issues are referred to as “Conduit” issues because the City acts as a conduit for the borrower to either: i) receive a debt structure that results in a tax-exempt interest rate, or ii) provides greater access to potential investors, thus, decreasing the interest cost associated with the project. While the City may make efforts to facilitate the desires of these entities, the Finance Director will ensure the highest quality structure and issuance is contemplated and that the City is insulated from potential risks. The City may sponsor conduit financing for those activities (i.e. economic development, housing, health facilities, etc.) that have a general public purpose and are consistent with the City's overall service and policy objectives as determined by the City Council. Any self-supporting debt such as this must first be approved by the Finance Director before being submitted to City Council for authorization. All conduit financings must insulate the City completely from any credit risk or exposure.
If adopted, Resolution 22-10C will:
1. Authorize the issuance and sale of a conduit bond issuance of not more than $26 million on behalf of the Waterford School who will use the proceeds to finance the costs of a new science building, other improvements, and to refund other outstanding school facility revenue bonds.
2. Authorize the publication of a Notice of Bonds to be Issued
3. Authorize the publication of a Notice of Public Hearing as related to this issue
4. Provide for the running of a contest period
Further action to be taken:
The Council will hold a public hearing on March 1, 2022 and consider the adoption of the final bond resolution on April 5, 2022.
Recommended Action and/or Suggested Motion:
Recommendation
Motion to adopt Resolution 22-10C