Hewitt council approves notice to issue certificates of obligation; discusses refunding options
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Summary
The Hewitt City Council voted 5-0 to publish a notice of intent to issue certificates of obligation up to $16 million and heard from financial advisers about a concurrent bond refunding that could save about $415,000 net if market conditions hold.
The Hewitt City Council voted 5-0 to approve Resolution No. 2025-03, a statutorily required notice of intention to issue certificates of obligation, a step that allows the city to proceed toward borrowing if it chooses.
The notice sets a not-to-exceed amount of $16,000,000 for possible borrowing; as City attorney Mr. Thomas told the council, “That doesn't mean that you're going to issue $16,000,000 but it is an amount, at this present time that we're looking at.” The resolution only authorizes publication of the notice; any final sale would come back to the council for approval.
Andrew Freeman, a financial adviser with Samco Capital Markets, and his partner Jack McLaney briefed the council on the timetable and on a potential concurrent refunding of outstanding 2010 obligations. Freeman said state legislative activity posed no immediate restriction on municipal borrowing and described the notice as the first step in the financing timetable. He said the city would consider a final mix of cash and projects and return for a sale vote on Aug. 4, with funds delivered around Aug. 27 if the council approves the sale.
Jack McLaney laid out savings from a possible refunding of the city's 2010 bonds, projecting net present-value savings of roughly 4.23% and total net cash savings of about $415,000 through 2037. Advisers estimated refunding transaction costs at about $100,000, leaving net savings north of $400,000 under current assumptions. McLaney told the council that the percentage figure was “right there in the middle” of typical policy thresholds and asked for informal direction on whether the city would be willing to proceed at a roughly 4% present-value savings threshold.
Councilmembers discussed thresholds for proceeding — some said they would be comfortable at 3% while others preferred 4% — and asked staff to continue monitoring markets. Freeman and McLaney recommended that the council provide a direction and said the city should confirm a decision roughly two weeks before the proposed sale date so the offering document can be finalized.
Formal action tonight was limited to publication of the notice; the motion to approve Resolution No. 2025-03 was moved by Councilmember Potter, seconded by Councilmember Turner, and carried 5-0.
Councilmembers also asked staff for a clearer project list tied to any borrowing. Mr. Thomas said staff would provide a capital improvement plan and project list to help the council crystallize the amount before the August sale vote.
