Posting Language
Title
Approve an ordinance authorizing the issuance and sale of tax-exempt City of Austin, Texas Public Improvement and Refunding Bonds, Series 2025, in a par amount not to exceed $442,570,000, to be used for transportation; mobility; flood mitigation open space, and water quality protection; parks and recreation; library and cultural arts; health; and public safety, in accordance with the parameters set out in the ordinance, authorizing related documents, and approving the payment of the costs of issuance, and all related fees. Funding: The Fiscal Year 2026 debt service requirements and estimated annual administration fees for the paying agent/registrar for the proposed bond sale are included in the 2025-26 Proposed Operating Budget of the General Obligation Debt Service Fund.
Body
Lead Department
Financial Services Department
Fiscal Note
The Fiscal Year 2026 debt service requirements and estimated annual administration fees for the paying agent/registrar for the proposed bond sale are included in the 2025-26 Proposed Operating Budget of the General Obligation Debt Service Fund.
Prior Council Action:
Reimbursement Resolutions approved by City Council:
Resolution 20150908-007
Resolution 20190910-006
Resolution 20190910-006
Resolution 20200827-005
Resolution 20210304-060
Resolution 20210902-067
Resolution 20210902-068
For More Information:
Belinda Weaver, Treasurer, 512-974-7885.
Additional Backup Information:
Approval of this ordinance will authorize the issuance of up to $442,570,000 in City of Austin Public Improvement and Refunding Bonds, Series 2025, consisting of up to $273,100,000 in new money bonds for voter approved projects and up to $169,470,000 for refunding bonds for debt service savings. The new money portion of the bonds will provide funding for:
|
Election Year |
Description |
New Money Amount |
|
2012 |
Transportation |
$ 1,000,000 |
|
2016 |
Transportation/Mobility |
80,000,000 |
|
2018 |
Flood Mitigation, Open Space, Water Quality Protection |
55,000,000 |
|
2018 |
Parks and Recreation |
20,000,000 |
|
2018 |
Library and Cultural Arts |
18,000,000 |
|
2018 |
Health |
4,100,000 |
|
2018 |
Public Safety |
15,000,000 |
|
2018 |
Transportation |
5,000,000 |
|
2020 |
Transportation |
75,000,000 |
|
|
|
$273,100,000 |
The $273,100,000 in new money bonds is being issued to provide funding for reimbursement resolutions that were previously approved by Council. Reimbursement resolutions declare an issuer’s official intent to reimburse a project’s expenditure with the proceeds of obligations to be issued after the expenditure may have occurred. The action is required by federal rules and state law. The City generally submits reimbursement resolutions for Council consideration as a part of the annual budget adoption in August/September, the same time as the new capital appropriations are adopted, or at the time of a capital budget amendment for a particular project.
The General Obligation Debt Service cost for the new money bond issuance of $273,100,000 is estimated as follows:
|
|
Total Over 20 Years: |
Average Per Year |
|
Principal |
|
$273,100,000 |
$13,655,000 |
|
Interest |
|
165,185,250 |
8,259,263 |
|
Total Debt Service |
|
$438,285,250 |
$21,914,263 |
In addition to the new money bonds described above, approval of this ordinance will authorize the issuance of refunding bonds in an amount not to exceed $169,470,000 to refund outstanding bonds of the City, for debt service savings, as described below:
• $169,470,000 will be authorized to refund certain outstanding bonds for present value savings. Eligible bonds to be refunded include the City’s outstanding, currently callable Public Improvement Bonds, Series 2012A, currently callable Certificates of Obligation, Series 2012, Public Improvement Bonds Series 2015 (callable on September 1, 2025) and Certificates of Obligation Series 2015 (callable on September 1, 2025). The City’s financial advisor, PFM Financial Advisors LLC, continues to monitor the refunding savings and the City will consult with PFM closer to the bond pricing date to determine which maturities from the currently callable bonds identified above result in present value savings (lower debt service costs) that exceed the City’s target guideline of 4.25% of the refunded bonds. Only those bonds that meet or exceed the City’s criteria for refunding savings will be eligible for inclusion in the bond sale.
In order to provide the City with the flexibility to respond quickly to changing market conditions, the proposed ordinance delegates the authority to the City Manager, Chief Financial Officer, or Director of Financial Services (each a Pricing Officer) to complete the sale of the bond transaction in accordance with the parameters in the ordinance, including selecting for refunding and redemption some or all of the obligations eligible for refunding as provided in the ordinance. Additionally, the authority of the Pricing Officer to exercise the authority delegated by Council under this ordinance expires on January 24, 2026.
This transaction will be sold through the following underwriting team:
Senior Manager: Wells Fargo
Co-Senior Manager: Raymond James & Assoc.
Co-Managers: Robert W. Baird & Co, Ramirez & Co, and Stifel Nicolaus & Co.
For this transaction, McCall, Parkhurst & Horton L.L.P. will serve as bond counsel, and Orrick, Herrington & Sutcliffe LLP will serve as disclosure counsel. PFM Financial Advisors, LLC., is the City’s financial advisor.