CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the ordinance authorizing the issuance of Series 2025 General Obligation Bonds for an amount not to exceed $46,000,000, including the defeasance of Series 2013 General Obligation Bonds
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Director
BOARD/COMMISSION REVIEW:
The Financial Advisory Board (FAB) reviews debt issuance plans as part of the annual budget process. The proposed bond issuance was specifically discussed at the September 4 and October 28, 2024, board meetings during the review of electric and water utility rates. FAB is supportive of bonds as a strategic financing mechanism for capital improvement projects.
BACKGROUND:
In November 2023, the City Council approved the 2024 Annual Budget and Capital Improvement Program (CIP). The 2024 CIP included $44,377,000 in capital projects without an identifiable funding source. Then, in December 2024, the City Council approved the 2025 Annual Budget and CIP, which included $53,900,000 in unfunded capital projects. By adopting these budgets, the City Council tentatively authorized staff to pursue issuing bonds for the payment of all unfunded capital projects, with the City Council having final approval of any bond sale.
Since 2018, the City has issued bonds using a project reimbursement methodology. This allows staff to analyze capital project spending and make any adjustments to the required borrowing amounts. This practice also allows staff to manage cash flow better and reduce the amount of interest costs incurred.
To use this methodology, the City is required to pass an Official Intent for Reimbursement Resolution regarding capital projects. This allows projects approved through the annual budget to be included in any future bond sale. The resolution itself does not provide the authorization to borrow, it only reserves the ability to fund current projects with a future bond sale.
On January 16, 2024, the City Council adopted Res...
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