Title
Ordinance - Ordinance Authorizing the Issuance and Sale of City of Mansfield, Texas, General Obligation Refunding and Improvement Bonds, Series 2016; Levying a Tax in Payment Thereof; Prescribing the Form of Said Bonds; Approving Execution and Delivery of an Escrow Agreement and a Bond Purchase Agreement; Approving the Official Statement; Approving an Engagement Letter; and Enacting Other Provisions Relating Thereto
Requested Action
City Council of the City of Mansfield, Texas, adopt an Ordinance authorizing the issuance and Sale of Refunding and Improvement Bonds, Series 2016, for the purpose of refunding outstanding debt and issuing bonds for the library design.
Recommendation
Staff recommends the approval of the Ordinance.
Description/History
Refunding
Interest rates in the Municipal Bond Market have been lower over the past several years because the accommodative monetary policy of the Reserve Bank as a result of the Great Recession. These low rates have created the opportunity for the city to issue new bonds to pay off older outstanding bonds that have higher interest rates to save on the city’s annual debt service costs. The refunding in the amount of $13,550,000* is expected to create a net present value savings of $1,802,341.42* for the respective issues being refunded. See the attached schedules for more detail on the savings estimates.
• Total Expected Average Annual Savings - $155,291.24*
*Note - amounts are expected and subject to change based on the actual results of the sale.
Summarizing: The City is taking advantage of market conditions to create interest savings by refunding old bonds with new bonds.
The Series of Bonds being refunded: the General Obligation Bond Series 2007B, $3,495,000, Certificates of Obligation Bond Series 2007A, $815,000, General Obligation Bond Series, 2008, $2,150,000, Certificates of Obligation Bond Series 2008, $8,015,000
New Money
City is issuing money for the design of the library in the amount of $1,355,000*
Justification
Funding Source
The City of Mansfield, Texas as defined by Ordinance - General Fund.
Prepared By
Peter Phillis, CPA, Director of Business Service
817-276-4261