Northlake Council previews COs, GOs and hotel-occupancy revenue bond plan to fund Star Center and infrastructure

Town staff on Thursday outlined a three-track borrowing plan to finance the Star Center and several public-infrastructure projects, including a certificates of obligation (CO) tranche, previously approved general obligation (GO) debt and a revenue bond supported by hotel-occupancy tax.

Drew, a town staff member, told the council the COs would require publication of two notices of intent but would not by themselves commit the town to issuing the debt. He said council would be asked to approve issuance on March 13 and that funds for the COs would be delivered on April 10. For the GO and revenue bonds, he said pricing would come February 27, authorization would follow, and funds would be delivered March 27.

The revenue bond would fund part of the planned hotel and conference center. Drew said the building cost is $5,900,000, the town paid $1,800,000 for land and that the total comes to about $7,700,000. He said $1,300,000 would be cash on hand and the remainder financed with hotel-occupancy-tax receipts. He said the town is counting only existing hotel receipts, not revenues from new hotels, and that the revenue bond would use 5% of the town—s 7% hotel-occupancy tax because 2% would be allocated to the Star Center.

Drew described other projects proposed for the CO tranche, including public infrastructure for Chadwick Farms and Faught Road, a waterline to delineate two pressure planes in the north, architectural design for a Public Works building, a sewer segment coordinated with the Star Center contractor, and a southwest elevated storage tank in the Petrus-area development. He said the town has capacity to pay the debt but that margins are tight and the town—s financial advisor recommended separating the deliveries of funds by debt type.

No formal action was taken on the borrowing plan at the meeting; staff asked council to approve notices of intent on the consent agenda and return for final debt-authorizing action at future meetings.

Ending

Drew closed by asking for questions on the debt service; council discussion was limited and the matter will return for formal authorization on the calendar dates staff provided.