Council approves parameters for $35.3M certificates of obligation and GO bond tranche; pricing set for June 25 closing

Staff member Julie presented parameters for two ordinances authorizing certificates of obligation (COs) and a tranche of general obligation (GO) bonds, and council approved both measures by unanimous vote.

—On October 6 we did a reimbursement resolution for both the COs and GOs. Total amount, 79,325,000,— Julie said, and outlined adjustments since then including a reduced CO principal and the split between improvement and refunding portions for the GOs.

Julie and a market team present described the CO maximum principal and project breakdown: a CO principal amount of up to $35,265,000 that would fund street and fire station facilities (~$21,000,000) and a water/wastewater component (~$13,000,000). The GO improvements parcel included amounts authorized to fund park and street projects; the refunding portion would require a net present value savings of 3.5% or more and a true interest cost below 5% to proceed.

A financial advisor said the sale pricing is scheduled this week with expected true interest costs just below 3.2% on refunding and roughly 3.68% for new-money GO debt; the COs were projected near 4%. Staff noted the parameters allow shelving the sale if market conditions deteriorate.

Why it matters: the financing will fund capital projects listed in prior voter-authorized propositions and town planning and preserves the council's ability to time the market and abort pricing if rates move adversely.

What the council did: motions to approve item K1 (COs) and item K2 (GOs) were made and passed by unanimous roll call votes.

For reference: staff named underwriting firms and counsel present and said the closing and delivery of funds are planned for June 25.