Flower Mound council clears parameters for $19.2 million certificates of obligation; S&P affirms AAA rating

The Flower Mound Town Council approved parameters for the issuance of Certificates of Obligation with a principal cap of $19,200,000 and a maturity not to exceed March 1, 2045. The action sets maximum financing parameters and authorizes staff and the town’s financial advisors to pursue competitive sale under those limits.

Town staff and financial advisors described changes to an earlier plan. Staff reported an initial reimbursement resolution for up to $43.9 million in preliminary capital expenditures; the principal for this issuance was reduced to $19.2 million after re-scoping and timing adjustments to certain projects. Staff said firefighting facilities were delayed about a year, and itemized project lists for the issuance included $5.0 million for firefighting facilities, $6.2 million for water projects and $7.8 million for wastewater projects.

Michael Martin of Hilltop, the town’s financial advisor, told the council Standard & Poor’s had reaffirmed the town’s AAA credit rating and that current market indications gave a projected true interest cost of approximately 4.3 percent for the competitive sale. “Standard & Poor’s reaffirmed our AAA rating,” Michael Martin said during the presentation.

The council voted unanimously to adopt the ordinance establishing the parameters for the sale. If market conditions are favorable, staff said the town will proceed with a competitive sale and expects to receive sale proceeds later in June under the timeline discussed at the meeting.

The parameters ordinance authorizes staff to proceed within the stated principal cap and interest-cost limits and allows a market-window period for issuance. Staff said they will report competitive-sale results back to council.