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Authority approves up to $7 million in revenue bonds for Mountain Creek project
Summary
The Public Utility District Public Financing Authority approved Resolution 26-01 authorizing up to $7,000,000 in revenue bonds to finance the Mountain Creek project, selecting a 20-year public offering as the recommended structure and setting a special meeting April 3 to complete related documents.
The Public Utility District Public Financing Authority approved Resolution 26-01 on a voice vote to authorize the issuance of revenue bonds not to exceed $7,000,000 to support the Mountain Creek project.
Phil, controller and treasurer for the authority and treasurer of finance administration for TCPUD, told the board the finance team recommended a 20-year public bond offering. "This is a recommendation to adopt this resolution authorizing 7,000,000 in bonds for, the Mountain Creek project," he said, explaining the option's impact on annual and total debt service.
Phil said the board had previously authorized staff to pursue up to $37,500,000 in combined financing for two projects and that the current resolution is specific to the Madden Creek portion. In comparing options he said the 20-year public offering lowers annual debt service versus a direct placement and "does save the district over 2,500,000 in the in the lifetime, the lifetime of the the loan." The finance team noted all three modeled options would still fall within the district's projected annual debt-service capacity of about $500,000.
Ken Deacker of Del Rio Advisors, a member of the finance team, described the rating process and the potential benefit of purchasing bond insurance or a surety to avoid a cash-funded reserve fund. He said the reserve could be "close to $500,000 equal to 1 year of debt service approximately," and that obtaining insurance could raise the effective rating by relying on the insurer's rating.
A board member asked whether the total debt-service figure included issuance costs and insurance; the finance team confirmed it did. The motion to approve the resolution was moved and seconded and the board recorded affirmative votes; the chair declared the motion passed.
The authority also approved execution of the installment purchase agreement and the indenture of trust as part of the action. The finance team will bring three remaining documents — the continuing disclosure certificate, the purchase contract, and the preliminary official statement — for approval at a special meeting on April 3 as the financing process advances.
