Attached is a parameters Ordinance prepared by the City's bond counsel, Norton Rose Fulbright US LLP, that authorizes the issuance and sale of "City of Allen, Texas, WW&SS Revenue Bonds, Series 2018." The bonds are for the purpose of providing funds for construction, acquisition and improvements for projects that were identified in the 2018 Utility Rate Study. The dollar amount for the 2018 bond issue is currently established at $10,000,000.  The funding will support the following projects: Phase 1 and Phase 2 of Hillside Village infrastructure improvements, design cost for Windridge Estates and Stacy Pump Station No. 1.  Based on the October 10, 2017, Reimbursement Resolution, the proceeds from the sale of the Waterworks & Sewer System Revenue Bonds will reimburse $3.35 million back to the Water Sewer Fund, which was used to complete the work on the Water & Sewer Infrastructure Replacement Project for Hillside Village.

A parameter sale allows the City to take advantage of market conditions and pricing opportunities. The bonds are priced on a certain date and the pricing is approved by an appointed Pricing Officer of the City. The deal has to be structured within certain parameters indicated in the authorizing ordinance. Such parameters for the bonds include: the size to not to exceed $10,000,000, the true interest cost rate not to exceed 4.0%, and the maximum maturity date for the bonds not to exceed twenty years from the date of the Bonds.

The attached Ordinance sets the form, details of, and authorizes the issuance and delivery of the bonds. The bonds are obligations of the City and are payable from the net revenues of the WW&SS. The negotiated sale will be finalized with the authorized Pricing Officer approving the transaction after it has been structured. The Pricing Officers listed in the ordinance are the City Manager and the Chief Financial Officer. The plan is to price the bonds in mid-July. If the timetable does not change, the plan is to have the bond closing on August 15.

The City will apply to Standard & Poor's Corporation (S&P) for ratings on the bond issue. Bond insurance will not be pursued since the City's underlying bond rating is AAA from S&P.

Due to the size of the issue, two underwriting firms are expected to be involved in the bond sale. Various documents such as the Bond Purchase Agreement, and Paying Agent/Registrar Agreement will be finalized and executed by the authorized Pricing Officer.

Depending upon the final interest rates, the debt payment associated with the issuance of $10,000,000 in new improvement bonds is expected to be an increase in the average annual debt service amount of approximately $699,599. The debt issuance will be structured to mature in 20 years. The debt payments will begin in fiscal year 2019.

Staff recommends the City Council adopt the Ordinance authorizing the issuance of "City of Allen, Texas, WW&SS Revenue Bonds, Series 2018"; establishing the parameters for the sale and issuance of such bonds; appointing Pricing Officers; delegating certain matters to authorized officials of the City; and the approval and distribution of an Official Statement.

I make a motion to adopt Ordinance No. ________ authorizing the issuance of "City of Allen, Texas, WW&SS Revenue Bonds, Series 2018"; establishing the parameters for the sale and issuance of such bonds; and delegating certain matters to authorized officials of the City.