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Council authorizes notice to issue certificates of obligation and steps sale to August
Summary
The council approved a resolution to publish notice of the city’s intent to issue certificates of obligation and later authorized selling those COs together with voter-approved bonds to target the tax rate; advisors estimated market interest near 4%–4.15% at current conditions.
The Saginaw City Council approved a notice-of-intention resolution to publish the city’s planned issuance of certificates of obligation (COs) and later authorized packaging COs with voter-approved bonds to streamline issuance and target the interest-and-sinking tax rate.
Andrew Friedman of Samco Capital Markets, the city’s financial advisor, told the council the resolution is the first legal step to publish the maximum borrowing amount, the permitted purposes for the proceeds and the schedule for the sale. Friedman said the notice will be published on the city website and in the newspaper and that the council would consider sale approval at its Aug. 4 meeting; if the sale proceeds favorably and council approves, the COs would close Sept. 2 and funds would be used for projects Friedman listed, including a new fire truck, fire-department improvements and an animal services facility.
On expected market conditions, Friedman said long-term rates have been volatile but that pricing that day would land "right around 4% to 4.15%." Council moved and passed the notice resolution; later, council approved authorization for the bonds and COs to be sold together to reduce issuance costs and better target the tax-rate impacts. A council member noted the TERS fund will be used where possible to buy down tax impacts for East McElroy projects.
