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City OKs publication to start process for up to $23 million in certificates of obligation
Summary
The Portland City Council approved a resolution to publish notice of intent to issue up to $23 million in certificates of obligation to fund capital projects and to pursue a refinancing opportunity; officials outlined an April bond-market date and a May closing.
The Portland City Council on Feb. 18 approved Resolution 9-27, authorizing publication of a notice of intent to issue the city’s combination tax and limited pledge revenue certificates of obligation in an aggregate principal amount not to exceed $23,000,000.
The action starts a statutory process that City financial staff said would allow the city to enter the bond market on April 22 and close on May 22 to fund projects in the city’s capital improvement plan and to refinance an existing issue.
Victor Quiroga, the city’s financial advisor, told the council the plan envisions two transactions: a certificates of obligation issuance of roughly $20 million and a separate refinancing of outstanding certificates and general obligation bonds issued in 2018. “We anticipate entering the bond market on April 22,” Quiroga said, and said the city anticipates receiving the proceeds at closing on May 22. He described a 25-year repayment term for the tax-supported component and estimated the tax-supported portion at $16,000,000, about $3.6 million supported by the utility system and $3,400,000 by the drainage fund.
Quiroga presented a preliminary estimate that the tax impact to support the $16 million tax-supported component could be about 4.21 cents per $100 of assessed value; he described that figure as preliminary and contingent on certified values expected in late July. On the refinancing, Quiroga said the city is looking to refinance roughly $7,970,000 of principal, retain the current final maturity of Aug. 15, 2038, and expected preliminary present-value savings of roughly $620,000 if market conditions hold on the April pricing date.
The resolution before the council only authorized publication of the notice of intent and began the publication process required under state law; it does not itself issue debt. Councilman Albrecht moved the resolution, Councilman Bethel seconded, and the motion carried on a 4-0 vote.
Council members asked no substantive questions during the presentation. Quiroga emphasized several times that the figures shown were preliminary and that the exact interest rates and savings will not be locked until the April pricing date.
The council’s action moves the city into the formal timeline required to seek bond-market pricing and to close on the financing under the terms outlined by the city’s financial advisor.
