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Rio Rancho council approves parameters for up to $25 million utilities revenue bond for water and wastewater
Summary
The City of Rio Rancho governing body approved parameters for up to $25 million in utilities revenue bonds to finance water and wastewater improvements.
The City of Rio Rancho governing body approved parameters for issuance of up to $25,000,000 in utilities revenue bonds to finance water and wastewater system improvements.
Director Jaramillo told the council the financial services department "is seeking adoption of a parameters ordinance for issuance of utilities revenue bond with an aggregate principal amount not to exceed $25,000,000." He said the bonds are intended to fund projects identified in the utility capital improvement plan and to keep debt service predictable.
According to staff, the utility's capital improvement plan totals about $218,000,000 over the next five years and the proposed issuance is the first of a planned bonding cycle intended to stabilize rates while providing funds for large projects. The ordinance sets several parameters: the pledged revenue will be utilities net revenue; interest rates "will not exceed 12%"; the final maturity date will not be beyond 05/15/2057; and an underwriter's discount, if a negotiated sale is used, will not exceed 1%. Jaramillo said the bonds may be sold by competitive bid or by negotiated sale depending on what is in the city's best interest at the time.
The proposed ordinance also delegates authority to the mayor, the city manager and the finance director to execute documents necessary to complete a sale. Staff recommended approval and "stood for questions," according to the meeting transcript.
Council moved and seconded to approve O-26. There were no members of the public signed up to speak on the item. Ms. Davis called the roll; Councilors Tyler, List, Dabson, Weimer, Linnentine and Culbreth voted yes and the ordinance parameters were approved.
The vote approved the ordinance parameters; the ordinance authorizes staff to proceed under the stated caps and delegations. Next steps identified by staff include selecting a sale method (competitive or negotiated) and executing closing documents under the delegated authority.
