AGENDA #4k

 

MEMORANDUM

 

TO:                  Roger L. Stancil, Town Manager

 

FROM:            Kay Johnson, Finance Director

SUBJECT:      Bond Sale Resolution

 

DATE:            September 27, 2006

 

PURPOSE

 

The attached resolution provides final, formal authorization for the $4.95 million bond sale approved by the Council as a part of the 2006-07 budget process.

 

BACKGROUND AND DISCUSSION

 

As a part of the 2006-07 budget process, the Council revised the plan for bond sales to include a sale of $4.95 million in bonds in fall of 2006.  The Budget Message for the Recommended Budget read: “Per the Council’s proposed schedule, we would issue bonds in the fall of 2006-07.  We have reexamined the timing of proposed bond-funded projects and recommend reducing the total borrowing in 2006-07 to $4.95 million and increasing the borrowing in a later sale, based on expected needs and timing of projects.”  In particular, the planning for three parks projects (Bolin Creek Trail, Morgan Creek Trail and Dry Creek Trail) make it more appropriate to borrow for the actual construction of these projects in later bond sales.

 

The sale has been scheduled through the Local Government Commission for October 17, 2006.  As shown as a part of the chart below, that sale would include $600,000 for sidewalk construction, $50,000 for pedestrian amenities, $1 million for streetscape, $1.5 million for library improvements, $800,000 for open space, and $1 million for parks and recreation improvements. 

 

2003 Bond Referendum – Proposed Sales Schedule

 

 

This attached resolution fulfills a number of legal requirements.  Specifically, this resolution does the following:

  1. Formally authorizes the sale of $4,950,000 in public improvement bonds for the various purposes noted in the resolution;
  2. Formally pledges the Town’s taxing power to provide for payment on the bonds;
  3. Approves the proposed form of the bonds themselves;
  4. Approves the form of the draft official statement for use in offering bonds to investors;
  5. States the Town’s agreement to comply with the relevant provisions of federal tax law;
  6. States the Town’s agreement to comply with federal rules for continuing disclosure to the securities markets; and
  7. Authorizes Town staff to complete the process of issuing the bonds, and approves the steps to that end previously taken.

In Section 5 of the resolution the Council approves the form of the Official Statement.  A draft of the Official Statement is attached.

 

NEXT STEPS

 

Staff will meet with bond rating agencies in late September.  The electronic preliminary statement offering the bonds will be released on October 6.  The actual sale is scheduled for October 17, with closing scheduled for November 7.  No further action is required of the Town Council.

 

RECOMMENDATION

 

That the Council approve the attached resolution approving the sale of $4.95 million in general obligation bonds for October 17, 2006.

 

ATTACHMENT

 

  1. Draft Official Statement for proposed October 17, 2006 bond sale (begin new page 1).