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 2021." 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 2021 bond issue is currently established at $11,500,000. The funding will support the following projects: $3,000,000 for Windridge Sewer Rehab Phase 2 and $8,500,000 for Sloan Creek Lift Station.

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 transaction has to be structured within certain parameters indicated in the authorizing ordinance. Such parameters for the bonds include: the size to not to exceed $11,500,000, the true interest cost rate not to exceed 4%, and the maximum maturity date for the bonds not to exceed June 2041 (20 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 water and sewer operations. 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 Chief Financial Officer and the Mayor. The plan is to price the bonds in the second week of June. If the timetable does not change, the plan is to have the bond closing on June 30. 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 $7,500,000 in new improvement bonds is expected to be an increase in the average annual debt service amount of approximately $750,000. The debt issuance will be structured to mature in 20 years. The debt payments will begin in fiscal year 2022.

Staff recommends that the City Council adopt the Ordinance authorizing the issuance of "City of Allen, Texas, WW&SS Revenue Bonds, Series 2021"; establishing the parameters for the sale and issuance of such bonds; delegating certain matters to authorized officials of the City.

I make a motion to adopt Ordinance No. _______________ authorizing the issuance of "City of Allen, Texas, WW&SS Revenue Bonds, Series 2021"; establishing the parameters for the sale and issuance of such bonds; and delegating certain matters to authorized officials of the City.