Rowlett — The City Council on July 15 approved a set of parameter ordinances authorizing city pricing officers to price and sell multiple tranches of debt for projects identified in prior bond elections and capital planning.
City financial staff told the council the sale would be structured in separate series and each tranche requires a separate motion. The council approved: general obligation bonds up to $48,000,000 (30-year maturity), combination tax and limited surplus revenue certificates of obligation up to $10,100,000 (20 years), tax notes up to $3,100,000 (7 years) and water and sewer revenue bonds up to $14,900,000 (20 years). The combined principal limits total $76.1 million. Staff presented a maximum true interest cost cap of 5.5 percent for each series; preliminary modeling showed a possible true interest cost near 4.75 percent for the general obligation series.
"This step is to approve or receive council's approval to allow pricing officers of the city to price and sell the debt, to be done at a later date," staff said during the presentation. The financing is intended to fund projects from the 2023 and 2024 bond elections and other capital needs including public safety facilities, park and street projects, street lighting, the Rowlett Community Centre, and water and sewer improvements.
Councilors discussed market timing and long-term debt load. Councilmember Shoop noted the 5.5 percent ceiling was conservative and asked if rates were likely to be lower; staff replied that markets are volatile but that current estimates had cushion. The council conducted four separate motions — one for each tranche — and each passed by unanimous vote.
Council members said they would monitor true interest costs during pricing and that pricing officers will finalize terms in accordance with the parameters approved by council. Delivery of funds was described as expected before the end of the fiscal year. The action gives staff the authority to proceed with notice of sale, work with underwriters, and finalize the transactions within the stated parameters.