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Sweetwater council approves notice of intent to seek up to $2 million in certificates of obligation for EMS and fire equipment
Summary
The Sweetwater City Council approved a resolution to publish notice of intent to issue up to $2 million in combination tax and revenue certificates of obligation to buy a fire truck and ambulance; council will review bids in August and could change the final borrowing amount before sale.
The Sweetwater City Council on June 10 approved a resolution directing publication of a notice of intention to issue up to $2,000,000 in combination tax and revenue certificates of obligation to pay for city emergency medical services equipment and a fire truck.
Andrew Preamen, financial adviser with Samco Capital Markets, told the council the notice of intent is the legal step that allows the city to begin the borrowing process. "That notice of intent lays out what the proceeds of the certificates of obligation will be spent on," he said. Preamen said publication would run and then the city would solicit bids; if the council moved forward the timetable would bring bids back to the council at its Aug. 12 meeting with money delivered around Aug. 28.
Preamen described proposed amortization and limits: the fire truck would be amortized over 15 years and the ambulance over five years, bundled into a single financing to gain economies of scale. He said the resolution sets a “not to exceed” borrowing amount of $2,000,000 and does not permit the city to borrow more than that amount under the published notice. "If before we get to the pricing date of those bonds, we're directed to borrow less than that $2,000,000, we certainly can," he said.
Preamen also discussed tax implications in preliminary terms, saying staff would have more certainty when certified taxable values are available at pricing. He estimated a potential tax-rate impact, telling the council it could amount to "about 3.1¢ to about 6.5¢ on the line," and warned final figures would come with certified values and actual bid results.
Council members voted to adopt the resolution to publish the notice of intent; the council will consider sale and final terms after bids are received and taxable values are certified.
The action begins a multi-step process: publish the notice of intent, solicit bids, return to council with bid results and a sale resolution (anticipated Aug. 12), then, if awarded, receive funds in late August and begin repayment per the adopted amortization schedule.
