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Council authorizes certificates of obligation and approves refunding; one member abstains on CO vote
Summary
At its Aug. 4 meeting the council approved a plan to issue about $9 million in certificates of obligation and approved a separate refunding that staff said will net about $341,388 in lifetime debt-service savings; the CO motion passed with an abstention.
Hewitt — The City Council on Aug. 4 approved ordinances authorizing a combined package of certificates of obligation to fund capital projects and a refunding of outstanding debt the city said would generate net savings.
The city’s financial adviser, Andrew Friedman of SAMCO Capital Markets, told the council the package was structured so the city would receive roughly $9,000,000 at closing after underwriter premium and issuance costs. He said the transaction relied on a recent credit review in which rating agencies “affirmed the city's AA credit rating.” Friedman said the COs are amortized over 20 years and callable after nine years.
Nut graf: Council approved two financing actions: (1) an issuance of certificates of obligation that staff said would fund priority street and utility projects and (2) a general-obligation bond refunding of earlier certificates that staff estimated would yield approximately $341,388 in net savings over the remaining term — about $30,000 per year on average — and would not extend the maturity schedule.
Council debated whether to delay the CO underwriter approval until the full council could attend a future meeting. One council member requested tabling to allow all seven members to vote; staff and the financial adviser warned delay could risk higher market costs or reduced underwriting options. Ultimately the council voted to approve ordinance 2025-12 authorizing issuance and sale of the combination tax-and-revenue certificates of obligation, series 2025, with the motion made and seconded on the record; the roll call included three affirmative votes and one abstention recorded during the meeting. The transcript records the mover as Mister McKalli (motion) and second as Mister Potter.
On the separate refunding item, staff said market conditions produced sufficient savings to meet the council’s previously discussed threshold (about 3%). The refunding of the series 2010 COs was projected to produce gross savings that, net of issuance costs, equal about $341,388 — a stated net savings of roughly 3.6% — and the council approved ordinance 2025-13 authorizing the refunding. The refunding vote carried unanimously, 4–0, on the night’s roll call.
Ending: Staff said closing is scheduled later in August and that market pricing and settlement steps will follow normal procedures. Council did not modify the spending plan during the votes; specific project allocations will be finalized consistent with the staff priority list presented during the workshop.
