LTC 614-2017 Results of Recent Bond SalesOFFICE OF THE CITY MANAGEP
LTC # 614-2017 LETTER TO COMMISSION
TO: Dan Gelber and Members of the City C17)
mission (,
FROM: Jimmy L. Morales, City Manager . DATE: December 22, 2017
SUBJECT: Results of Recent Bond Sales
The purpose of this LTC is to advise the Mayor and City Commission of the results of recent bond
sales for the Stormwater System and the Water & Sewer System. The City had two very successful
bond pricings in November and December 2017 to provide $100 million in funds for stormwater capital
improvements and $85 million in water and sewer capital improvements.
The City was also able to combine these new money needs with refinancings of outstanding debt at
lower interest rates to provide savings. The recently approved Senate and House Tax Reform
legislation eliminates advance refunding bonds effective January 1, 2018. The City successfully
accelerated its stormwater bond issue several months to advance refund previous Stormwater Bonds
and lock in $5.5 million in savings over the life of the refinancing. The advance refunding of certain
Water and Sewer Bonds generated $7.2 million in savings over the life of the refinancing.
Stormwater Bonds
The City's $156,550,000 Stormwater Revenue and Revenue Refunding Bonds, Series 2017, provide
$100 million for capital improvements. The Bonds have an all-inclusive true interest cost of 3.81% for
30 year fixed rate debt.
The Series 2017 Stormwater Bonds also refinanced $69 million in previous bond issues at lower
interest rates. The financing was originally scheduled for 2018, but was accelerated due to the
proposed elimination of advance refundings in the federal government's tax reform legislation. The
advance refunding generated $5.5 million in savings, with average annual savings of $230,000 in
2018-2041.
(Nater & Sewer Bonds
The City's $115,180,000 Water and Sewer Revenue and Revenue Refunding Bonds, Series 2017,
provide $85 million for capital improvements. The Bonds have an all-inclusive true interest cost of
3.75% for 30 year fixed rate debt.
The Series 2017 Water and Sewer Bonds also refinanced $44 million in previous bond issues at lower
interest rates. The advance refunding generated $7.2 million in savings, with average annual savings
of $550,000 in 2018 — 2030. The refinancing also restructured the debt to provide more overall level
debt service, which reduces the impact of the additional debt service for capital improvements to
ratepayers.
In summary, strong credit ratings helped the City's bond issues receive robust demand in a buyer's
market with the highest level of supply since the Tax Reform Act of 1986. Locking in low financing
costs for capital improvements and achieving interest savings for the City's Water and Sewer and
Stormwater systems greatly benefit current and future ratepayers.
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